Food delivery service Zomato is in talks to buy Uber Eats’ India business, sources familiar with the matter told TechCrunch. The deal values Uber Eats’ India business at $400 million currently, and the rideshare giant would potentially be able to invest $150 to $200 million in Zomato.
The deal comes as Uber Eats struggles to stay competitive in India, where it is currently the number three player behind Zomato and Prosus-backed food delivery service Swiggy. Uber Eats currently makes roughly half a million deliveries each day, while its competitors each do well over 1 million orders daily.
Uber has been in talks with Zomato since November of this year.
India isn’t the first country Uber Eats has backed out of. In September of this year, the company shuttered its business in South Korea, citing “competitive pressures” most notably from Woowa Bros.’ Baedal Minjok food delivery service. (The South Korean market got a further shot of consolidation last week when Woowa announced plans to acquire Delivery Hero for $4 billion.)
Uber posted over $1 billion in losses on its most recent earnings call, where it also noted that its Eats business was still losing enormous amounts of money. In India, the company projected a negative revenue of $107.5 million for Uber Eats between August and December of this year, according to TechCrunch. The company also announced layoffs, which included Uber Eats team members, in October.
Uber and Zomato are still finalizing terms of the deal, which could go through before the end of this year. The $150 to $200 million investment would give Uber a sizable stake in the Zomato and therefore entry back into India’s food delivery market. The combined forces of Zomato and Uber Eats would make for the largest food delivery service in India, ahead of Swiggy.