December 16 (UPI) — Uber, the online car company, is in talks to sell its takeaway ride-hailing service UberEats’ Indian business to local rival Zomato, according tomedia reports. Uber hopes the move will help cut global spending.
People familiar with the matter said the deal valued Uber Eats’ Indian operations at about $400m. As part of the deal, Uber could invest $150m-200m in Zomato in exchange for a large stake in the latter. Zomato has been in existence for 11 years. An Uber spokesman declined to comment.
Deepinder Goyal, Zomato’s founder and chief executive, who met with Uber executives recently, has yet to respond to a request for comment. Mr Goyal acknowledged earlier this month that Zomato was in the final stages of the latest $600m financing, and the deal comes at a time of high. Earlier media reports said Ant Financial led Zomato’s $600 million financing.
Uber and Zomato are still in talks, but the deal could be finalized before the end of the year, according to people familiar with the matter. Uber has previously held talks with Prosus venturesa-backed Swiggy over the sale of Uber Eats’ Indian business.
Last year, Swiggy raised $1 billion, with Tencent’s majority shareholder Naspers leading the way, tencent and the U.S. group.
In mid-2017, Uber launched its takeaway service, UberEats, in India. Despite the company’s big discounts to customers, UberEats has never posed a real threat to Zomato and Swiggy, which handle more than a million orders a day. By comparison, UberEats has a top-order ingress of less than 600,000 daily orders.
In addition, Uber Eats has struggled in recent quarters, with two key executives, Bhavik Rathod, Uber Eats’ head of India and Southeast Asia, and Deepak Reddy, uber’s head of operations in India. left the company.
During a visit to India in October, Dara Khosrowshahi, Uber’s chief executive, said the company remained committed to the Indian market, but he sidestepped questions about the future of UberEats in India.
In a recent earnings call, Cosrosasi acknowledged that UberEats faces stiff competition in India, but said the company would continue to operate in the courier space. Uber expects revenue from its Uber Eats business in India to be negative $107.5 million between August and December.
In recent months, Zomato has been working to reduce cash consumption in its takeaway business. Info Edge, an investor in Zhongmato, told analysts on a earnings conference call last month that the company had lost more than $40m a month as of last year and had now cut its monthly loss to $20m. (Small)