Zomato has acquired Uber Eats in an all-stocks deal. As per reports, the deal is valued at about $350 million (Rs 2,500 crore approximately).
As a part of the deal, Uber will get around 10% stake in the Gurugram-based food delivery app and Uber Eats will cease to exist as a separate entity. In addition to that, all of Uber Eats’ customers will be directed to Zomato.
According to a report by The Economic Times, Zomato will not be absorbing Uber Eats’ executives working in India. The Uber Eats’ team which comprises of about 100 executives will either be laid off or assigned to separate verticals within Uber. Uber, however, will continue to operate its cab-hailing service in India wherein it competes with rival, Ola.
We entered food delivery in India in 2017 and today is when our journey takes a different route. Zomato has acquired Uber Eats in India and we'll no longer be available here with immediate effect. We wish all our users more good times with great food on the road ahead pic.twitter.com/WEbJNaJY8M— Uber Eats India (@UberEats_IND) January 21, 2020
“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,” Deepinder Goyal, Founder and CEO of Zomato said in a statement to IANS.
“We entered food delivery in India in 2017 and today is when our journey takes a different route. Zomato has acquired Uber Eats in India and we’ll no longer be available here with immediate effect. We wish all our users more good times with great food on the road ahead,” Uber Eats India wrote on its official Twitter handle.
As per a separate report by TechCrunch last month, Uber is also likely to invest $150 to $200 million in Zomato. However, these details haven’t been finalised yet.
The report also says Uber had projected losses of about Rs 2,200 in its food delivery business in India in December last year. The deal is expected to help Uber cut its losses in the country. It is also likely to help Zomato gain a strong foothold in areas, which includes parts of Madhya Pradesh, Tamil Nadu and Kerala, where Uber Eats has a stronger presence.
It is worth noting that the talks of the deal came at a time when Zomato is close to securing fresh funding of $600 million from Ant Financial, which is an Alibaba subsidiary. That would peg the company at a valuation of $3 million.