Ride-hailing major Uber sold its food delivery business in India to food-tech giant Zomato for $206 million according to the firm’s recent regulatory filings.

Zomato had acquired UberEats India in January in an all-stock transaction with UberEats selling the business for a 9.99 per cent stake in the online food delivery business.

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The two companies had not disclosed the financial terms of the deal back in January.

Zomato, apart from the payout also reimbursed $35 million in goods and services tax to the US-based ride-hailing giant.

“The estimated fair value of the consideration received is $206 million, which includes the investment valued at $171 million and the $35 million of reimbursement of goods and services tax receivable from Zomato,” Uber said.

The deal shows a significant cut in Zomato’s valuation which stood at over $3 billion in January with $150 million fresh investment in its latest funding round according to its regulatory filings.

Uber in its annual disclosures had said that it does not participate in any day-to-day management of the Indian food-tech giant’s operations and is not represented on the board. Therefore, the company does not hold any rights of a primary investor. Uber’s ownership of 9.99 per cent stake in the company poses significant risk for the firm.

“Our ownership in these entities involves significant risks that are outside our control. We are not represented on the management team or board of directors of Didi or Zomato, and therefore we do not participate in the day-to-day management of Didi or Zomato or the actions taken by the board of directors of Didi and Zomato,” Uber further said.

Didi is a Chinese firm in which Uber holds a stake. Uber had sold its China wing to Didi Chuxing, a Chinese ride-hailing platform in 2016.

Zomato’s acquisition of UberEats threatened a duopoly in the Indian food-tech industry which is expected to touch the $8-billion mark in the next two years with a CAGR of 25-30 per cent, according to a report by Google and Boston Consulting Group (BCG).

This could be disrupted by tech giant Amazon’s entry into food delivery services in Inda. Tech mogul and Amazon CEO Jeff Bezos recently partnered up with Infosys co-founder NR Narayana Murthy in a new joint venture-Prione Business Services to foray into India’s online food delivery market according to previous reports.

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