September 23, 2022
With the recent news of Zomato acquiring Uber eats, the deal has marked yet another round of consolidation in India’s thriving food delivery business where companies backed by large investors have struggled to find sustainable business models.
As speculated for months now, the news came as a shock to all the foodaholics when the food delivery business Uber Eats of Uber Technologies Inc. today twitted about shutting down their Indian operations after being acquired by the Gurugram-based food-tech unicorn Zomato as it's now planning to be the google of food.
According to the Economics times, the food industry Giant Zomato today acquired the Indian business of Uber Eats in an all-stock deal valued between somewhere between $300-$500 Million that will give Uber a 9.99 percent stake in the Indian food delivery and restaurant discovery platform.
Uber will continue to remain a separate brand in India but will discontinue operations and restaurants, delivery partners, and users of the Uber Eats apps will be redirected to the Zomato platform whenever they chose the option of 'get food delivered’ with effect from 21st January 2020.
However, the platform wasn’t doing so well monetarily. According to the Ministry of Corporate Affairs Filings, Uber Eats was stated to bear a loss of INR 762.5 Cr ($107.6 Mn) between August and December 2019. Moreover, even in the same fifth month period, Uber was said to have higher operating losses of INR 2,197 Cr ($309.6 Mn).
Deepinder Goyal, Co-founder, and CEO, Zomato, stated that this acquisition would help the company strengthen its position in the country in the food delivery and food tech space.
Meanwhile, Uber’s CEO Dara Khosrowshahi 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. The Indian market has been always been important to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader.”
The year has started on an interesting note for the food tech industry. Last year, the food-tech saw a tough battle between Swiggy and Zomato, it seems like we will see a repeat of the same this year. There has been a recent boom about with Amazon set to make its entry into the food tech space in the Indian market
After the exit of Uber Eats from the food tech industry, currently, there are two key players in the food app space including Zomato & Swiggy. Although Swiggy has been leading in most parts of India, Zomato with its new addition aims to gain some momentum this year & it would be interesting to see how Zomato will be benefited after acquiring Uber Eats?