Zomato gobbles up UberEats
With this deal, Zomato claimed to have become No. 1 in the food delivery space, which is projected to reach $15 billion by 2023.
Chennai: Driving consolidation in the food delivery space, Zomato has acquired UberEats in an all-stock deal valued Rs 2,485 crore.
The deal will give cab-hailing firm Uber a 9.99 per cent stake in Zomato. Though Zomato did not reveal the value of the transaction, sources peg it around $350 million, or Rs 2,485 crore. Zomato had recently raised $150 million from Alibaba affiliate Ant Financial.
With this deal, Zomato claimed to have become No. 1 in the food delivery space, which is projected to reach $15 billion by 2023.
“We have acquired Uber Eats India and with this development, we are the undisputed market leaders in the food delivery category in India,” said Deepinder Goyal, founder and CEO, Zomato.
According to RedSeer Consulting data, Swiggy has been the leading player in the food delivery space with 14 lakh daily deliveries, followed by Zomato making 12 lakh deliveries and UberEats around 4 lakh.
The strength of the delivery network of UberEats will benefit Zomato in growing its market share in south India and compete more fiercely with Swiggy nationwide.
Uber has been looking out for buyers for its food delivery business for some time as it has been making losses. UberEats will discontinue its operations and direct restaurants, delivery partners, and users of the app to the Zomato platform.
“Through this deal, UberEats India users now become Zomato users. I want to assure UberEats India users that their user experience won’t be compromised in any way,” said Goyal.
“Similarly, the delivery partners who were earlier associated with Uber Eats India will be on-boarded on our fleet,” he added.
The industry is likely to see more consolidation in the future as the cash burn and losses make smaller players difficult to sustain.
"Uber selling UberEats to Zomato is a sign of consolidation, which happens typically to achieve leadership post companies achieving sizeable aggregation. Zomato now has more than 50 per cent share in food delivery market with this deal,” said Yagnesh Sanghrajka, chief financial officer at 100X.VC.