Days after raising $150 million from Ant Financials at a $3 billion valuation, online food delivery platform Zomato has now announced that it has acquired UberEats India in an all-stock deal. While the company has not revealed financial details, report indicates that the deal is worth around $350 million.
The report further adds that with this all-stock transaction, US-based ride-hailing giant will now hold around 10 percent shares of Gurgaon-based Zomato. Now, Uber Eats will stop operations in the county and its users will be redirected to Zomato’s app.
Now, the combined entity of Zomato and UberEats India is expected to cover more than 50-55 percent of the market in terms of the number and value of orders, placing the company ahead of Swiggy.
Interestingly, Zomato is not acquiring the team of UberEats in India which means that around 100 executives of the company will be laid off or be assigned to other verticals within the parent company.
With this acquisition of UberEats, the Indian food delivery market is now a proper duopoly with just two players in the market — Zomato and Swiggy. It finally puts an end to the year-long struggle to offload UberEats India business to either Zomato or Swiggy after the company held multiple talks.
When we reported about Zomato being in talks with Uber to acquire its food delivery business in India, the deal was reportedly valued at $400 million. It was also said that Uber will be investing around $150-200 million in Zomato but nothing of that sort has been announced by the company.
Uber launched the UberEats food delivery service in India in 2017, which was seen as a competitor to the likes of Swiggy and Zomato. However, instead of being the third potent option for the food delivery service in India, the company started struggling in the market.
The ride-hailing service company has been shuttering or downsizing its loss-making units and geographies and with a cash burn of $20 million per month in India, the business was among the low-priority ones for the company.