Zomato acquires Uber Eats in India

Indian food app Zomato announced today that it has acquired Uber’s food delivery business in the country in an all-stock transaction that gives the US-based ride-hailing firm 9.99% ownership of Zomato.

Photo credit: Franklin Heijnen / Flickr

According to Zomato’s announcement, Uber Eats in India will discontinue operations and transfer restaurants, delivery partners, and users of its app to the Zomato platform effective today.

“The competition in this space is going to continue to be intense, and the food delivery category is still very small compared to the overall food service market in India,” Deepinder Goyal, founder and CEO of Zomato, said. “This category will continue to grow and get built over the next couple of decades […].”

Uber, meanwhile, will continue its ride-hailing business in the country. “India remains an exceptionally important market to Uber, and we will continue to invest in growing our local Rides business, which is already the clear category leader,” said Uber CEO Dara Khosrowshahi.

Although Zomato didn’t specify the financial details of the deal, people familiar with the matter told the Economic Times that the transaction was worth around US$350 million.

Launched in India in 2017, Uber Eats faced local rivals including Ant Financial-backed Zomato and Swiggy, which together control about 80% of the food delivery market, according to the New York Times.

Zomato says it covers over 1.5 million restaurants across 24 countries and serves more than 70 million users every month.

According to Bloomberg, the deal would see Zomato reach monthly food orders of 50 million, up from the current 40 million, and help the company compete with Swiggy.

The report also said the the move was part of Uber’s effort to cut back on its loss-making operations globally as it faces pressure from investors to be profitable. The US company aims to be profitable on an EBITDA basis by 2021.