Zomato emerges as front-runner to buy Uber Eats in India, sources say

India’s Zomato emerged as the front-runner to acquire Uber’s food delivery business in the country, which bears an asking price of around US$500 million, three sources directly briefed on the matter told The Economic Times.

Photo credit: Piotr Trojanowski

According to the report, the final size of the deal may still change, but ongoing negotiations involve a stock deal for Uber Eats. “The talks with Zomato are now progressing towards a term sheet, and discussions are more realistic this time around,” one of the sources said.

Uber may also invest in Zomato’s ongoing US$600 million round, which is said to be led by Alibaba’s Ant Financial.

While discussions between Uber and Zomato have been ongoing for the last several weeks, the US-based company has also put out feelers to Zomato rival Swiggy more recently, but talks are yet to take shape.

The deal is attractive for Zomato as it will help bolster its presence in cities in south India, a strong market for Swiggy, according to the report.

Uber Eats entered India’s on-demand food delivery space in 2017, starting in Mumbai.

A little over a year ago, it announced a partnership with Cafe Coffee Day to expand its food delivery service to 246 cities across India.

After a few months, it was reported that Uber Eats was in the final stages of negotiations to sell its Indian operations to Swiggy. However, the two companies have reportedly stalled their merger talks over financial and taxation issues.

In July, a report indicated that Uber was in early talks with Amazon India about a possible acquisition.