Published 12:27 IST, January 21st 2020
MEGA MOVE: Zomato buys Uber Eats in India for 9.99% stake - Here's how it'll impact users
India’s leading food delivery aggregator Zomato acquired Uber Eats India in an all-stock transaction, giving Uber 9.99 per cent ownership in the Indian startup.
India’s leading food delivery aggregator Zomato acquired Uber Eats India in an all-stock transaction, giving Uber 9.99 per cent ownership in the Indian startup backed by China’s Ant Financial, a subsidiary of Alibaba. The latest acquisition could push Zomato as a clear leader in the food delivery business in India where it is in direct competition with another Indian startup Swiggy.
Uber Eats, which entered Indian food delivery business in 2017, will no longer be available with immediate effect. Zomato said that Uber Eats will discontinue its operations in India and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform.
How it affects users
Indian users of Uber Eats app, who have ordered from the food delivery platform since July 1, 2019, have their account set up on Zomato automatically. Users who are looking for help with their past orders can reach to Uber’s customer service through http://help.uber.com/ubereats.
Impact on Uber Eats India employees
According to media reports, Uber sealed the acquisition deal with an estimated value of around $350 million (Rs 2,492 crore approx). But the acquisition is reportedly impacting about 200 Uber Eats India employees as Zomato has not agreed to absorb them.
Zomato, which has a presence across 24 countries and serves more than 70 million users every month, recently received fresh funding of $150 million from Ant Financial. After the latest deal, Zomato would be looking to dilute the losses incurred in 2019 that saw a 24 times jump to Rs 2058 crore from Rs 84 crore in the preceding year.
CEOs speak
“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,” said Deepinder Goyal, Founder and CEO, Zomato, in a statement.
Dara Khosrowshahi, CEO of Uber Technologies, Inc., said that India remains an ‘exceptionally important’ market to Uber and the company will invest in growing local Rides business.
“We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success,” said Khosrowshahi in a statement.
Updated 12:27 IST, January 21st 2020