Here comes the first major acquisition news from the Indian startup ecosystem. Food delivery company Zomato has agreed to buy Uber’s Food delivery business Uber eats in an all-stock deal. The deal is valued at around $350 Million and Uber will get a 10 percent stake in Zomato.
“We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category,” Zomato CEO Deepinder Goyal said.
Uber’s food delivery business Uber Eats struggled to grow after the launch in 2017. It had 26,000 restaurant partners and garnered about 12% of the market in the past 3 years. Uber Eats couldn’t compete well against rivals like Zomato and Swiggy.
Uber Eats will discontinue operations and will direct restaurants, delivery partners, and users to the Zomato.
Uber Eats released a press statement saying, “We have announced today that Zomato has acquired Uber Eats in India. As such, you will no longer be able to order from Uber Eats in India, but you will be able to enjoy your favorite meals with exciting offers tailored for you on Zomato.”
Zomato is currently valued at over $3 billion and is leading the food delivery market in India.
Uber will now focus on its ride business and expansion to tier 2 cities.
