Uber is reportedly selling its delivery service UberEats India business to local competitor Zomato. The company can sell its food delivery app business at around $400 million, and Uber may invest $150 – $200 million further as part of the deal.
Earlier this month, founder and CEO of Zomato, Deepinder Goyal Singh said this company is aiming to raise up to $600 million in a new funding round. During the contact, Zomato said it “does not comment on speculations and rumors. UberEats and Zomato are still negotiating the terms, but the deal could finalize before the year ends.”
Zomato, a worldwide brand, existed since 2008, but it is headquartered in the north Indian city of Gurugran, acting as a domestic competitor to UberEats. UberEats last week launched its operations in Cuttack, Orissa, and has expressed plans to partner with some successful local restaurants.
Zomato has a definite mission to become the ‘Google of Food’ and but it is facing challenges in further scaling and last-mile delivery. As of last year, it has cut down its monthly loss more than $40 million to $20 million, successfully reduced its burn rate. Due to healthy market competition in food delivery services, in rival companies like Swiggy, FoodPanda, UberEats, and Zomato, a merger or exit was expected in the future as well.
Uber’s new CEO Dara Khosrowshahi said last month that he would leave the market where his company can’t reach the number one or number two position. UberFood is ranked after Zomato or Swiggy in India as they are leading the food tech industry by the number of orders or app users.
It is not only predicted that in the coming three years, but the food tech industry is also going to grow from $4 billion to $15 billion, and companies are building strong relations with partner restaurants for the more improved delivery experience to its customers.
Featured image: AFP