Uber is in forwarding stages of discussions to sell its food delivery service Uber Eats in India to local opponent Zomato as the American ride-hailing giant seems to slash its global spending.
More About The Deal
The deal presently considers Uber Eats’ India business at about $400 million, one of the sources said.
As part of the agreement, Uber may spend between $150 to $200 million in Zomato and receive a sizable stake in the 11-year-old Indian firm, people said.
A spokesperson of Uber refused to comment on this.
A message to Zomato founder and chief executive Deepinder Goyal, who met the Uber officials last week, remained unanswered.
Uber and Zomato are still settling the terms, but the deal can conclude before the end of the year, people said.
Indian newspaper Times of India initially published about Zomato and Uber’s talks last month.
The discussions come at a time when Zomato is nearly to close a current financing round of $600 million; Goyal informed news agency PTI earlier this month.
TechCrunch stated earlier that China’s Ant Financial was close to starting a funding round of up to $600 million in Zomato at an estimate of $3 billion.
If the deal passes through, it would indicate the end of a year-long effort for the U.S. giant that has had many conversations with both Zomato and Proses Ventures-backed Swiggy to offload Uber Eats’ India business.
The Journey of Uber Eats
Uber started its food delivery service in India around mid-2017.
Yet as the ride-hailing giant gave significant discounts to win customers, Uber Eats never posed an extreme threat to Zomato and Swiggy, both of which get more than 1 million orders every day.
In comparison, Uber Eats’ daily volume of orders topped at 600,000, said one of the sources.
The ride-hailing giant forecasted a negative income of $107.5 million for its Uber Eats business in India for the time between August and December of this year.
Zomato, also, has been decreasing its burn rate.
The company, which as of last year was dropping more than $40 million every month, has slashed its monthly loss to $20 million.
Meantime, Swiggy proceeds to grow to more cities and explore delivery ahead of the food category.
Although as Zomato and Uber Eats, Swiggy, also, is not profitable.
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