Zomato acquired Uber Eats in an all-stock deal for around $350 Million
The three years’ journey of Ubers food delivery business Uber eats in India finally came to an end after Gurugram based food tech company Zomato acquired it in an all-stock deal for around $350 Million (2485 crores).
Behind the Scene
The deal will result in Uber Eats getting 10% shareholding in Zomato. The combined entity is expected to gather more than 55% market (550+ cities) share pulling it ahead of Swiggy in the online food ordering and delivery space.
The customers of Uber eats will be directed away to Zomato which will result into Zomato becoming the largest player.
Zomato CEO Deepinder Goyal has assured the Uber India users that their user experience won’t be compromised and Zomato will keep moving ahead on its mission of providing better food to more people with utmost diligence and sincerity.
CEO of Uber Dara Khosrowshahi wished Zomato continued success and said that India will remain an important market and they will keep investing and growing their local rides business.
Key Results and Impacts
The deal will result into shifting of all the Uber delivery partners on Zomato Deck. However, Ant Financial backed Zomato will not absorb the 100+ existing Uber Eats employees which might result into second consecutive layoff after OYO India laid off its workforce last week.
The development came after Zomato raised $150 million in fresh funding from Ant financial, a subsidiary of China Based giant Alibaba last week. Uber eats was already struggling in the highly competitive market space with projected higher operating losses of 2197 crore between August to December 2019.
Impact on Info Edge
As Info Edge is the second largest shareholder in Zomato so it is very necessary to understand the impact’s to them as well. The deal will result the shareholding pattern of Info Edge to 22.71%. This will even result into the decrease in Cash Burns for the Gurgaon based giant as per the Info Edge CFO & ED Chintan Thakkar. According to the Info Edge CEO Sanjeev Bikhchandani the deal will help Zomato to enhance the presence in some cities where Uber Eats is more strong and they welcome the acquisition on the positive note.
It will be an exciting game to watch as two major online food delivery business competing for market share.
Till then get into bed and enjoy delicious food on route!!