Uber Eats has sold its India business to food delivery giant Zomato for $206 million, according to an AsiaTechDaily article. The deal was first announced in January, though at the time financial terms were not disclosed. This official price tag on the deal comes from Uber’s latest filing with the US Securities and Exchange Commission.
The deal gives Uber a 9.99 percent stake in Zomato. It also dictates that Uber will shutter its Eats business operations in the Indian market and that its Eats restaurant customers there will become part of the Zomato ecosystem.
Uber said in the filing that the estimated fair value of the consideration received is $206 million, which includes the investment valued at $171 million and the $35 million of reimbursement of goods and services tax receivable from Zomato.
Uber’s exit from the Indian market leaves just two companies competing for food delivery dominance: Zomato and its key rival, Naspers-backed Swiggy, which is India’s number one food delivery service according to estimates. Both companies process roughly half a million more orders daily than Eats had been doing in India.
The Indian market won’t stay a duopoly for long, though. Just days ago, Amazon announced it plans to enter the Indian food delivery market with a service that would be offered as part of either its Prime Now or Amazon Fresh platform. Said service could launch as soon as this month. While the company’s entry into the market wouldn’t be a complete breeze, given both Swiggy and Zomato’s popularity, if anyone has the deep pockets and operational prowess to crush that duopoly, it’s Amazon.
Amazon aside, the Zomato-Uber Eats deal is also another step in the food delivery industry’s move towards further consolidation as these cash-burning services back out of loss-making markets. India isn’t the first market where Uber Eats has shuttered its services. In 2019, the company got out of South Korea, where Woowa Bros.’ Baedal Minjok has a 75 percent marketshare. Also in 2019, Postmates shuttered its Mexico City office.
Elsewhere, UK-based Just Eat merged with Takeaway.com to form one of the largest food delivery services in the world, and Woowa Bros. itself was bought by Delivery Hero at the end of December. These, along with the Uber Eats-Zomato deal are certainly not the last we’ll hear of mergers, acquisitions, and closings, as consolidation in the food delivery space continues.