'Zomato eats up Uber Eats', Twitter reacts to the Uber Eats - Zomato merger

Indian food delivery app Zomato has acquired Uber Eats -- an online food ordering and delivery platform launched by a ride-hailing company Uber. Uber Eats sold its India business to Deepinder Goyal-led Zomato in an all-stock deal. With this deal, Zomato has emerged as single largest player in India’s online food ordering and delivery . Essentially, Uber benefits from 9.99 per cent stake in joint venture.

Zomato has more to gain out of all this

As a result of this deal, Uber Eats has pulled plug on its India operations effective Tuesday (January 21). But what does it mean for Zomato? We take a look. As of Tuesday, Zomato will see dition to its user base, courtesy of Uber Eats’ w-defunct India business. Although Zomato will longer have competition from Uber Eats, Zomato still gets to keep all its users to its vant though. Zomato clearly has more to gain, all credit goes to this merger-acquisition deal between Zomato and Uber Eats.

How will it affect competition?

Let’s get one thing straight, competition in any sector or business is important to keep industry healthy and functioning. deal between Zomato and Uber Eats marks possible consolidation in India's highly competitive and price-sensitive online food delivery market. In a regulatory filing to BSE, Info Edge (India) - a shareholder in Zomato - said its shareholding in Zomato will stand reduced to about 22.71 per cent on fully converted and diluted basis upon closing of transaction.

Interestingly eugh, deal comes days after Zomato raised $150 million in funding from existing investor Ant Financial, an Alibaba affiliate, at a $3 billion valuation. Zomato’s valuation has reportedly reached $3.55 billion post-Uber Eats India acquisition, which is expected to result in an increase of more than 50 million orders per month on its platform, resulting in 55 per cent market share for Zomato.

RE |  Zomato buys Uber Eats in India for 9.99% stake - Here's how it'll impact users

Meanwhile, Zomato founder and CEO Deepinder Goyal said:

“We are proud to have pioneered restaurant discovery and to have created a leing food delivery business across more than 500 cities in India. This acquisition significantly strengns our position in category.”

Uber Eats started its India operations in 2017. Uber Eats platform has about 26,000 restaurants listed on its platform spre across 41 Indian cities. However, Uber Eats app will continue to function outside India. It’s been quite some time since discussions between Uber Eats and Zomato over possible merger-acquisition were on. Uber Eats h been making losses, courtesy of stiff competition from Swiggy and Zomato.

Uber h projected an operating loss of Rs 2,197 crore in its food delivery business for five months through December 2019, according to a valuation report prepared by KPMG affiliate BSR and was part of regulatory filings. With Uber Eats out of its plate (pun intended), Uber will be able to better focus on its ride-sharing business.

"India remains an exceptionally important market to Uber and we will continue to invest in growing our local rides business, which is alrey clear category leer. We have been very impressed by Zomato's ability to grow rapidly in a capital-efficient manner and we wish m continued success," Uber CEO Dara Khosrowshahi to said in statement.

And here's how Twitterati reacted to Zomato-Uber Eats deal:

(Photo: Twitter/@Digitalkeyurs)