Uber is in the final stages of negotiations to sell its food delivery service UberEats ‘ India business to major rival Zomato, as the U.S. ride-hailing giant is trying to cut its spending worldwide.
According to sources, the deal is currently worth around $400 million. As part of an agreement, Uber could also invest between $150 million and $200 million in Zomato to get substantial shares in the firm.
These talks are taking place at a time when Zomato is in the final phase of closing a $600 million new funding round led by China’s Ant Financial.
If the transaction is to be finalised, it would mean the end of a year-long struggle for Uber Eats that has had multiple conversations with both Zomato and Prosus Ventures-backed Swiggy to unload its Indian branch.
Uber introduced its food delivery service in India in 2017. Even though it provided big discounts and attractive partnerships to sway consumers, it was unable to pose a real threat to Zomato and Swiggy, who each handle UberEats never faced a real threat to Zomato and Swiggy, who each handles more than a million orders a day. In contrast, UberEats’ average monthly orders stood at 600,000.
In a recent earnings call, the company’s executives admitted that UberEats is facing serious competition in India, but indicated that the business will continue to operate in the food delivery sector.
“The industry is very, very competitive right now. There are a few very strong competitors out there. Basically, I’d like to reassure you that we want to be # 1 or # 2 in every single market. Right now, we’re the # 3 in India. And so the team knows there’s a big challenge ahead of them, but we’re on it, ” Uber’s chief executive Dara Khosrowshahi said in August.