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Uber Sells Food Delivery Business In India To Zomato

ubereatszomato jan21 lt

After months of speculation, Uber Technologies Inc. divested its food delivery business in India to the local player Zomato Media Pvt. Ltd. in an all-stock deal. Following the deal, Uber will have 9.99 percent ownership in Zomato.

Effective Monday, Uber Eats in India discontinued operations and directs restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform.

It was in May 2017 that Uber Eats launched its business in India, where food delivery business was growing at rapid speed. According to a recent report by DataLabs by Inc42, India's online food delivery market is estimated to reach $12.53 billion by 2023, growing at a rate of 15 percent, compared to global growth rate of 9.01 percent.

However, Uber Eats was always far behind other local players including Swiggy and Zomato. Earlier, Uber CEO Dara Khosrowshahi had hinted a possible exit of the business from Indian market.

Khosrowshahi said the company chose Zomato for its ability to grow rapidly in a capital-efficient manner.

Zomato, which is valued more than $2 billion, is one of the biggest food delivery apps in the country. Its major investors include Alibaba's affiliate Ant Financial.

In July last year, there were reports that e-commerce giant Amazon, Zomato, as well as the major Indian competitor Swiggy, which is backed by Chinese tech giant Tencent, were looking to buy Uber's Indian food delivery app.

Uber, unable to compete enough with the local rivals, has already sold its businesses in Russia, China, and Southeast Asia in recent years. In October last year, Uber had laid off about 350 employees across several different teams, including from Uber Eats.

In December, there were reports of advanced talks taking place between Uber Eats and Zomato, as Uber wanted to cut down steep losses.

Regarding its future plans, Uber CEO said, "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."

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