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Zomato All Set To Acquire UberEats With Investment From Uber

Pritish raj by Pritish raj
December 16, 2019
in News, Startup
2 min read
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Zomato UberEats- Next Big Brand

Zomato UberEats- Next Big Brand

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  • Ride-hailing giant Uber is in talks to spend $100-200 million in fresh capital as part of selling their Indian business Uber Eats to local rival Zomato

Ride-hailing giant Uber is in talks to spend $100-200 million in fresh capital as part of selling their Indian food delivery business UberEats to local rival Zomato, multiple people directly aware of the deal said. The investment would join the Zomato and UberEats combined company, making the injection of the fund an integral part of the share-swap deal between the two, sources close to the issue said.

If the merger goes through, Zomato and UberEats that emerge as a hotly contested and cash-intensive online food delivery market by the number of orders and sizes ahead of Swiggy.
“While the contract is not yet signed, they are in an exclusive era, which ensures that both parties are unable to negotiate with others. Uber’s capital commitment can range from $100 million to $200 million, but this may be along with some other investment funds, “one of the individuals said.

Another said: “Zomato’s acquisition will only proceed if Uber invests in the joint company. We want Uber to have skin in the game, otherwise, the Indian business won’t make sense.

Feeding India Zomato- Next Big Brand
One of the best campaigns by Zomato.
Source- Zomato

Of course, UberEats had proposed selling their Indian company to Swiggy earlier this year, again in a share-swap deal, but negotiations fell through on tax implications and other conditions that were not agreeable to both parties. UberEats had been negotiating with Zomato before starting sales talks with Swiggy, but those negotiations had not been successful.
Zomato buying UberEats India’s latest development comes on the back of fundraising by the Gurgaon-based company, which will see current shareholder Ant Financial lead a $500 million round worth the company at around $3 billion, as first stated by ET on October 4. Over the next few months, the $500 million will be charged in a phased way.

The deal will also mean that Zomato takes on the cash burn of UberEats, a business-knowing executive said. Swiggy and Zomato — millions of dollars were also spent on sales and promotions, as much as $40-50 million a month. But Zomato was able to cut its burn by half to $20 million as of October UberEats will help Zomato gain access to the South Indian market where, unlike the North, which is its stronghold, the company was unable to make inroads. “There is a conversation that Zomato will use its own platform to deliver premium restaurants and UberEats to deliver mass-market deliveries,” one of the above-mentioned executives said.

Zomato said its number of orders per day is 1.25 million. Swiggy’s numbers are pegged at between 1.4 and 1.5 million and UberEats at 0.4-0.6 million per day, according to sources.

Tags: Uber Eats DeliveryZomato AppZomato controversy
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Pritish raj

Pritish raj

Pritish Raj is a content writer at Next Big Brand. Hailing from the diversified state of Bihar, he is an engineer by education who chooses the way of poetry, photography, and writing to kick off his career. Highly enthusiastic about brands and startups, he aims to be a travel content creator.

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