Reportedly uber has sold its loss-making online food-ordering business in india to local rival zomato in exchange for a 9.99 per cent stake in the startup backed by China's Ant Financial. Meanwhile zomato, valued at around $3 billion after raising money from Ant this month, will take over uber Eats' operations from Tuesday.
Perhaps since launching in india in 2017, uber Eats has struggled to gain market share and is a distant third to Tencent Holdings-backed swiggy and zomato and all three have spent heavily on deals and discounts to attract customers in a highly competitive market. Furthermore uber chief financial officer Nelson Chai said the move was another demonstration, following its decision to exit uber Eats south korea in october 2019, "of our commitment to take a hard look at Eats markets where we do not have a path to leadership".
Moreover the San Francisco-based firm, which has promised to be profitable at an operational level by the end of 2021, has been trying to sell the india Eats business for a year. Earlier it held talks with swiggy for a similar deal, but those fell through due to valuation and regulatory issues, two of them said. uber and swiggy did not respond to requests for comment. Apparently uber Eats' india operations contributed just 3 per of gross bookings for the business globally in the first nine months of last year, while accounting for a quarter of its adjusted operating losses. zomato reported a loss of $294 million for the year to march 2019, while swiggy made a loss of $330 million.
