In exchange for a 9.99 percent interest in the start-up sponsored by Chinese financial Ant, Uber sold its online food-ordering company in India to local rival Zomato, restricting its access to a crowded market where they were struggling to expand.
The all-stock deal is likely to push Zomato ahead of Swiggy, which counts China’s Tencent Holdings as an investor, to the top position in India’s food delivery market. Zomato-valued at about $3 billion (approximately Rs. 21,300 crores) after raising money from Alibaba affiliate Ant this month-said Uber Eats in India will temporarily suspend operations and direct restaurants, delivery partners and users from Tuesday to the Zomato platform.
“India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business,” said Dara Khosrowshahi, Uber’s chief executive officer.
Uber Eats in India accounted for 3 per cent of the global gross bookings of the firm, but over a quarter of its adjusted EBITDA loss in the first three quarters of 2019, the U.S. ride-hailing company said.
Uber Eats also pulled out earlier this year from South Korea. So, it said it will continue operating in Bangladesh and Sri Lanka. While this is the Indian online food supply market’s first major acquisition, deal activity has been heating up globally.
Earlier this month the Netherlands firm Takeaway.com pipped Prosus to buy UK’s Just Eat for 6.2 billion pounds ($8.1 billion). So, Germany’s Delivery Hero agreed in December to buy the top food delivery app. Thus, Owner Woowa Brothers from South Korea bought for $4 billion.
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