Zomato acquire Uber Eats India in an all-stock deal

Uber Eats India has sold its online food-ordering business in India to local rival Zomato in exchange for a 9.99% i.e around Rs 2,485 crore ($350 million) in an all-stock deal.

Since launching in India in 2017, Uber Eats has struggled so much to gain market share and came third after Swiggy and Zomato. All three online food ordering have spent heavily on deals and discounts to attract customers in a highly competitive market.

 Now, Zomato will not absorb Uber Eat employees, which means they will either be absorbed in Uber’s other verticals or could face lay-off. There’s less clarity on their future roles right now. The entire deal is worth around $350 million.

This acquiring deal of Uber India by Zomato will be an attractive this will also help them  to crack Swiggy’s stronghold in the southern states. After this acquiring Uber Eats will seize to exist as a separate Uber brand in India now and all its customers will be automatically redirected to Zomato’s app. While Swiggy is little ahead of Zomato in the food delivery space right now, Uber Eats coming onboard with Zomato will try more hard to take on Swiggy, and the combined entity will capture around 50-55 per cent market share.

When it comes to the Indian food delivery market, UberEats is a distant third in comparison to its rivals Zomato and Swiggy that gets 2-2.5 million orders every day. On the other hand, UberEats only gets 2,50,000-3,00,000 orders per day. As for the value of the order, on an average UberEats witnesses $2 per order as compared to $3-4 per order for Swiggy and Zomato.

Zomato CEO said in a statement “With our expansion to 550+ cities over the last year, our continued focus on user experience and our commitment to operating excellence, we have demonstrated our ability to execute on a variety of parameters”.

Zomato has operations across 24 countries and serves more than 70 million users every month.