Companies

Zomato acquires Uber Eats in all-stock transaction

S Ronendra Singh New Delhi | Updated on January 21, 2020 Published on January 21, 2020

Uber Eats to discontinue operations in India

Food delivery platform Zomato on Tuesday has said that it has acquired Uber’s food delivery business --  Uber Eats -- in India in an all-stock transaction.

With this, Uber Eats will discontinue operations in India. It will direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform, effective from 7 am on Tuesday. However, the deal gives Uber 9.99 per cent ownership in Zomato.

“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," Deepinder Goyal, Chief Executive Officer (CEO) of Zomato said.

Sources familiar with the deal told BusinessLine that Uber Eats was not doing well in India and was not meeting the company's target of being number one or two in the business. It was losing business by around 20 per cent of the company's EBIDTA margins and therefore decided to sell the business to Zomato.

However, 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,” Dara Khosrowshahi, Chief Executive Officer, Uber, said.

Zomato is a restaurant review, restaurant discovery, food delivery and dining out transactions platform. It provides in-depth information on over 1.5 million restaurants across 24 countries and serves more than 70 million users every month.

Published on January 21, 2020
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