Presently Swiggy is in talks with Uber to buy its food order and delivery business. Uber has plans to go in for a public offering and this move is reportedly part of that overall plan and to show a slightly healthier financial picture. Reportedly Zomato too, is in the race for UberEats.
Meanwhile the report states that the deal may involve a share swap where the shares of the acquiring company being allotted to Uber for the value of UberEats agreed upon. Furthermore in India’s highly competitive FoodTech market, UberEats is a distant third, servicing roughly 150,000 to 250,000 orders a day. Swiggy and Zomato do multiple times of this, but the company seems to be faring better than Foodpanda run by competitor in the ride sharing business, Ola.
Moreover Uber has had similar experience in some of the other markets it had entered, like China and Russia where it ultimately sold its stakes and almost in all cases to competitors. Apparently the current move to go in for an IPO and to sell off UberEats that clocks a regular loss of $15-$20 million each month, might be part of a larger plan going forward. It may be relevant to understand Swiggy and Zomato keep losing around double this amount each month and they are able to rack up and the hotels and restaurants offering a little more, operations may break even.
