Expanding its business from just cab-hailing to food delivery, Uber launched the UberEats food delivery service in India in 2017. When announced, the new offering was seen as a competitor to the likes of Swiggy and Zomato. A wide belief that prevailed during launch, was that Uber Eats could act as the third potent option to India’s aggressively expanding food ordering consumer.
Two years since, we are far from that belief. Uber Eats has been going through rough times since the past few quarters, with key executives also leaving. Uber as a whole isn’t in the best of shape. The IPO laid bare the gross losses that the company was bearing, its founder is off to building something new and didn’t spare much time before dumping shares and key executives have started departing.
And amid all of this, it is now being reported that Uber is all set to sell the India business of UberEats to Zomato. According to people familiar with the matter, the move is being taken as the US-based giant is looking to cut global spending.
According to the report, the deal currently values UberEats’ India business at around $400 million and as a part of the deal, Uber may invest around $150 to $200 million in Zomato and get a sizable stake in the company.
The report further adds that both the companies are still negotiating the terms but the deal could be finalized before the end of the year. The development comes at a time when Zomato is in final stages to close a new funding round of around $600 million, which could value the firm at $3 billion.
If the deal closes as planned, this will be a relief for Uber and would mark the end of year-long struggle to offload UberEats India business to either Zomato or Swiggy after multiple talks.
Recently, during earning call, Uber CEO Khosrowshahi has acknowledged that UberEats is facing tough competition in India but he had suggested that the company would continue to operate in the food delivery space. The company projected a negative revenue of $107.5 million for its UberEats business in India for the period between August and December of this year.
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