After several months of speculations, Zomato announced on Tuesday morning that it had acquired Uber Eats India. The all-stock deal gives Uber 9.99% ownership in Zomato. Uber Eats India will now discontinue operations and restaurants, delivery partners, and users of the Uber Eats apps will be directed to the Zomato platform, effective Tuesday.
While financial details of the deal have not been revealed by the company, ET reports the deal to be for around $350 million (Rs 2,485 crore).
“Through this deal, Uber Eats India users now become Zomato users,” a statement by Zomato said. Customers were moved to the new app from 7 am, and now are greeted with a message “Uber Eats Acquired From Zomato” when they open the Uber Eats app.
“You can still get rides via the Uber app, which remains active and available. And you can still use Uber Eats if you're traveling outside India. Until then, we hope you will enjoy many more tasty moments and discover great restaurants around you on Zomato,” Uber Eats told its India customers in an email.
UberEats customers who were directed to Zomato from Tuesday morning onwards would get a Zomato Gold trial for three months, and a 50% off on their next three orders.
In a blog post, Zomato Founder Deepinder Goyal assured Uber Eats India users that their user experience won’t be compromised in any way.
“The competition in this space is going to continue to be intense, and the food delivery category is still very small compared to the overall food service market in India. “This category will continue to grow and get built over the next couple of decades, as we work hand-in-hand with restaurants and food service providers to provide better food for more people.”
Dara Khosrowshahi, CEO of Uber, said: “Our Uber Eats team in India has achieved an incredible amount over the last two years, and I couldn’t be prouder of their ingenuity and dedication. India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success. ”
UberEats, which launched in India in 2017, had to face tough competition from Zomato and Swiggy, which, by then, were already established players in the Indian FoodTech market. While Uber tried to rely on massive discounts and deals to bring in customers, it could never garner the market share that Zomato and Swiggy enjoyed in the market.
Over the past year, as it accumulated losses, it began scaling back operations. As per an ET report, it cut its annual cash allocation by half to $90-120 million.
During the announcement of its last quarterly earnings, it was revealed that the Uber Eats had dragged down the average net revenue for the quarter. For the last five months of December, Uber projected negative revenue of Rs 762.5 crore in Uber Eats India.