The news came out on Tuesday morning by an announcement given by Zomato that it has acquired Uber's food delivery business primarily known as " Uber Eats " in an all stock transaction which gives Uber 9.99% ownership of Zomato. This deal mainly underlines the U.S. listed cab aggregator's effort to cut back on loss making business segments at a global level.
The sale of Uber Eats in India to Alibaba backed Zomato adds to a long list of divestitures the company has made post its disappointed public offering last year. As part of the latest deal, Zomato will take over Uber Eats customer base , restraunt partners and riders in exchange for a 9.99 percent stake that uber will hold in Zomato. A per the latest round of fundraise for Zomato, the company is valued at around $3 Billion. While the two companies did not share the deal size , sources said that it was pegged at around $300-350 million.
Dara Khosrowshahi , CEO of Uber said, " India remains an exceptionally market to Uber and we will continue to invest in growing our local rides business , which is already the clear category leader. ".
For Zomato, the deal means consolidating market share in the food delivery vertical in India that it makes its strength vast to compete against Swiggy. Prior to the deal Zomato and Swiggy together commanded almost 80% of the country's online food delivery market. Zomato's founder and CEO Deepinder Goyal added in a statement " This acquisition significantly strengthens our position in the category ".
So now if you are already a registered customer with Uber Eats, once you open the app a message will be displayed " Uber Eats Acquired by Zomato. If you have ordered from Uber Eats in India since July 1, 2019, your account is now set up on Zomato. Order from Zomato to get exciting offers from your favourite restraunts. For help with the past Uber Eats orders, visit help.uber.com/ubereats. "
Sources said that with the sale of the food business, Uber would now focus on its rides business and expansion to tier 2 cities.
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