After months of speculation by the media, Zomato has finally announced the acquisition of Uber Eats India in an all-stock transaction. As a part of the transaction, Uber will get a 9.99% ownership in the Indian food delivery unicorn.
Uber Eats has discontinued its operations in India immediately and directed its restaurant partners, delivery partners and customers to the Zomato platform.
This acquisition will strengthen Zomato’s food delivery business in India as it competes with Swiggy in a bid to dominate the food delivery market in India.
Talking about the transaction, Deepinder Goyal, Founder and CEO, Zomato, said, “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. ”
With the acquisition, Zomato also claims to be the undisputed market leader in the Indian food delivery space. However, in an interview with the TOI, Sriharha Majety, Co-Founder and CEO of Swiggy had hailed Swiggy to be the market leader with over 60% revenue share.
This news comes soon after Zomato had raised $150 million from Ant Financial at a valuation of $3 billion. The foodtech startup is also looking to rake in another $350 million in the coming months.
Last year in December, Zomato had also announced its goal of reaching profitability in 2020. It is to be seen how this acquisition can help Zomato with its goal as it continues to have a burn rate of $20 million per month.
Uber, on the other hand, will be looking to focus on its ride-hailing business in India where it competes with the Indian ride-hailing giant Ola.
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.”