Indian Economy News

Zomato acquires Uber Eats in all-stock transaction

  • IBEF
  • January 22, 2020

Zomato, a food delivery platform, said that it has acquired Uber's food delivery business, Uber Eats, in India in an all-stock transaction.

With this deal, Uber Eats operations will be discontinued in India and company will direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform, effective from 7 am on January 21st, 2020. Although, Uber holds 9.99 per cent ownership in Zomato after this deal.

"We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category," Mr Deepinder Goyal, Chief Executive Officer (CEO) of Zomato said.

According to sources familiar with the deal, Uber Eats was performing well in India and was unable to meet the company's target of being number one or two in the business. The company was losing business by around 20 per cent of its EBIDTA margins and thus decided to sell the business to Zomato.

Although, Uber Eats will remain active in Bangladesh and Sri Lanka, said the sources.

"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. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success," said Mr Dara Khosrowshahi, Chief Executive Officer.

Zomato is a restaurant review, restaurant discovery, food delivery and dining out transaction platform. It offers in-depth information on over 1.5 million restaurants across 24 countries and provide its service to more than 70 million users every month.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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