Gurugram-based food tech unicorn Zomato has acquired Uber Eats India, the food delivery business of ride-hailing company Uber in India. The all-stock transaction was announced early Tuesday and provides Uber a 9.99 percent stake in Zomato.
All of Uber Eats business details like customer information, delivery partners, and order history will now be transferred to Uber, consistent with an Uber statement. The Uber app will redirect users to Zomato for the subsequent six months whenever they chose the choice of ‘get food delivered’.
Alibaba’s Ant Financial-backed online food delivery and restaurant discovery platform Zomato has acquired Uber Eats, the food delivery business of ride-hailing giant Uber India for around Rs 2,485 crore ($350 million) in an all-stock deal. The deal gives the ride-hailing app a ten percent stake in Zomato.
Notably, Zomato won’t absorb Uber Eat employees, which suggests they’re going to either be absorbed in Uber’s other verticals or could face lay-off. There’s little clarity on their future roles immediately.
Deepinder Goyal, Co-founder, and CEO, Zomato, stated that this acquisition would help the corporation strengthen its position within the country within the food delivery and food tech space.
While the Indian business had grown significantly for Uber Eats, touching 12 percent of the food delivery share, it had accounted significantly less for the general global bookings for the food division. The division is believed to be making over 25 percent global losses in EBITDA.
However, Dara Khosrowshahi, CEO, Uber, stated that India would still be a big marketplace for the San Francisco-based ride-hailing company.
” We entered food delivery in India in 2017 and today is when our journey takes a different route. Zomato has acquired Uber Eats in India and we’ll no longer be available here with immediate effect. We wish all our users more good times with great food on the road ahead “
With the acquisition browsing, the combined entity of Zomato and Uber Eats India is predicted to corner quite a 50-55% market in terms of the amount and value of orders, pulling it before Swiggy.
“The deal is signed and customers are getting to be directed from Uber Eats to Zomato,” said one among the people conversant in the matter. Zomato, he said, expects to transition 90% of Uber Eats users onto its platform.
For Zomato, buying the distant third player helps it consolidate the market and puts it before its arch-rival Swiggy. it’s one less competition for the corporation to affect,”.
“In parts of Tamil Nadu, Kerala, and Madhya Pradesh, Uber Eats features a stronger foothold compared to Zomato with an about 30% market share”
Zomato has operations across 24 countries and serves quite 70 million users monthly.
Uber, on the opposite hand, that saw a lackluster IPO in May this year, had been struggling to sustain its food delivery business in India. Commenting on the event, Dara Khosrowshahi, CEO of Uber, said India remained an exceptionally important market to Uber and therefore the company would still invest in growing local rides business. “Our Uber Eats team in India has achieved a fantastic amount over the last two years, and that I couldn’t be prouder of their ingenuity and dedication. we’ve been very impressed by Zomato’s ability to grow rapidly during a capital-efficient manner and that we wish them continued success.”