Zomato Acquires Uber’s Food Delivery Business in India
21 January 2020 , Gurgaon, India: Zomato, one of the largest food apps in India, announced today that it has acquired Uber’s food delivery business in India in an all-stock transaction, which gives Uber 9.99% ownership in Zomato.
Deepinder Goyal, Founder and CEO, Zomato, commented: “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. ”
Dara Khosrowshahi, CEO of Uber, said: “Our Uber Eats team in India has achieved an incredible amount over the last two years, and I couldn’t be prouder of their ingenuity and dedication. India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success. ”
Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform, effective today.
About Zomato: Zomato is a restaurant review, restaurant discovery, food delivery and dining out transactions platform providing in-depth information for over 1.5 million restaurants across 24 countries and serves more than 70 million users every month.
About Uber: Uber’s mission is to create opportunity through movement. We started in 2010 to solve a simple problem: how do you get access to a ride at the touch of a button? More than 15 billion trips later, we’re building products to get people closer to where they want to be. By changing how people, food, and things move through cities, Uber is a platform that opens up the world to new possibilities.
Shares of Info Edge (India) climbed as much as 3.36 per cent to hit a high of Rs 2,676 apiece on the BSE in the intra-day trade on Tuesday after food aggregator Zomato signed a definitive agreement to acquire Uber Eats, Uber’s food delivery business in India, in an all-stock transaction.
Info Edge has a stake in Zomato, which upon closing of the said acquisition, will reduce to about 22.71 per cent on fully converted and diluted basis, it said in a regulatory filing.
At 10:21 am, the stock was trading nearly 1.5 per cent higher at Rs 2,626 apiece on the BSE. In comparison, the benchmark S&P BSE Sensex was trading 104 points or 0.25 per cent lower at 41,425 levels.
Uber will get a 9.9 per cent stake in Zomato as part of the deal whose size has not been disclosed. The deal for Uber Eats, which operates in 41 cities, was signed at 3 am, and its customers will be shifted to the Zomato app from 7 am. The deal is applicable only in India and Uber Eats will continue to operate in Bangladesh and Sri Lanka. According to sources the deal value is around $300- 350 million.
The move, according to reports, is part of Uber’s strategy to be either number one or two in each of their businesses in every country they operate. In India, Uber Eats grew very quickly to take a 12 per cent share of the food delivery market. However, while India constituted for 3 per cent of the global gross booking of Uber Eats it also constituted for 25 per cent of its global EBITDA losses for the business segment. Intense competition in India’s food delivery market prevented India Uber Eats from taking either the first or second position, which are with Zomato and Swiggy.
Thus far in the financial year 2019-20 (FY20), shares of Info Edge have outperformed the market by surging around 41 per cent against about 5 per cent rise in the benchmark Nifty50 index.
Source : Business Standaard