Zomato acquires Uber Eats India in all-cash deal
New Delhi, January 21, 2020
Zomato, one of the largest food apps in India, today announced that it had acquired ride share app Uber’s food delivery business in the country in an all-stock transaction, which gives Uber 9.99% ownership in the food delivery platform.
Deepinder Goyal, founder and CEO, Zomato, said: “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.”
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. ”
Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform, effective today, a press release from Zomato said.
Zomato is a restaurant review, restaurant discovery, food delivery and dining out transactions platform providing in-depth information for over 1.5 million restaurants across 24 countries and serves more than 70 million users every month.
"Uber’s mission is to create opportunity through movement. We started in 2010 to solve a simple problem: how do you get access to a ride at the touch of a button? More than 15 billion trips later, we’re building products to get people closer to where they want to be. By changing how people, food, and things move through cities, Uber is a platform that opens up the world to new possibilities," the release said.
In a blog on Zomato's website, Goyal said, "We have acquired Uber Eats India and with this development, we are the undisputed market leaders in the food delivery category in India."
"This is a key moment in our journey as it validates our collective achievement – we have worked very hard to get to this point. With our expansion to 550+ cities over the last year, our continued focus on user experience and our commitment to operating excellence, we have demonstrated our ability to execute on a variety of parameters.
"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.
"Our strength in the food delivery category brings with it its added responsibilities and we are keen on continuing to do what we have done this past year, as well as pay even closer attention to our brand, all our stakeholders and most importantly, our users. We must also not forget that with more orders comes greater environmental impact – you will be reading more on this from us in the near future.
"Through this deal, Uber Eats India users now become Zomato users. I want to assure Uber Eats India users that their user experience won’t be compromised in any way – if at all, the scale gives us higher density to make our deliveries faster. With Zomato, you’ll realise that we share a common love for great food.
"Our restaurant partners have innovated and delighted us in meeting the dizzying pace of consumer demand. And we will continue to work with them with utmost diligence and sincerity.
"Similarly, the delivery partners who were earlier associated with Uber Eats India will be on-boarded on our fleet. We welcome them and want to assure them we have their best interest in mind.
"Zomato’s mission is better food for more people. We started in 2010 and democratised restaurant discovery to help users find high quality food at restaurants, faster and cheaper. To say the least, this acquisition is a start of a new cycle in our ongoing journey and we could not have been any more excited about the future.
"In addition to food delivery, we continue to focus on building our dining out business – and Zomato Gold is now stronger than ever. Hyperpure, our fresh and clean ingredient supply business for restaurants is growing by leaps and bounds and we couldn’t be prouder of the impact that we are making on our users, delivery partners, restaurants, farmers, and our employees," Goyal added.
According to sources close to the deal, the deal is in the range of nearly $350 million or Rs 2,500 crore.
Zomato on January 10 announced it has secured $150 million in fresh funding from Ant Financial, a subsidiary of China-based giant Alibaba.
The latest round of funding in Zomato, which currently values the company at $3 billion, is part of a $600 million funding round announced by Zomato CEO Goyal at a Delhi event in December.
Uber started its food delivery service in India around mid-2017 but has not been able to scale it up.