UberEats sells to Indian rival, Zomato, for $206 million

Uber said that it has sold its food delivery operation in India to Zomato, a local competitor, for $206 million. In an all-stock deal, valued anywhere between $300-$500 million, the former will gain a 10 percent stake in Zomato

Both the start-ups are struggling to find a path to profitability in India, however, as they continue to dish out more than $15 million each month to win new customers and keep the existing ones happy.

“The estimated fair value of the consideration received is $206 million, which includes the investment valued at $171 million and the $35 million of reimbursement of goods and services tax receivable from Zomato,” Uber said.

Uber Eats will cease to exist as a separate brand locally and users on its platform will be redirected to Zomato’s app. With the acquisition going through, the combined entity of Zomato and Uber Eats India is expected to corner more than a 50-55% market in terms of the number and value of orders, pulling it ahead of Swiggy.

The deal also aligns with Uber’s plan to cut down losses and become profitable by 2021.