Zomato Can Acquire Uber Eats At A Valuation Of Rs 2800 Crore: Biggest Consolidation In Food Delivery Business?
Uber has reportedly going through the advanced stages of talks to sell UberEat’s India business to rival Zomato by the end of this year.
This news is likely to create a stir in the online food delivery industry in India.
How Did This Happen?
The deal “currently values UberEats‘ India business at around $400 million” according to a TechCrunch report on Monday.
“Uber may invest between $150 to $200 million in Zomato”, the report claimed, citing sources.
Zomato Founder and CEO Deepinder Goyal said the company is aiming to raise up to $600 million in a new funding round at an event in Delhi, earlier this month.
Why Would This Happen?
Zomato said it “does not comment on rumors or speculations” when contacted earlier.
UberEats has not made enough influence in the online food delivery segment, from its launch in the Indian market in 2017.
Compared to Zomato, it is currently delivering 1.3 million orders a day from 150,000 restaurants across India at more than 10 orders per restaurant per day.
While Swiggy has also expanded its services to 500 cities in India, matching rival Zomato’s reach in the country.
Swiggy, which has added 60,000 new restaurants in the past six months, said in October it would expand to 600 cities by December 2019.
What Is the Future For Online Food Delivery Industry In India?
From April 2019, Swiggy has increased the number of restaurant partners by almost 1.8 times to 1.4 lakh restaurants currently.
If we talk about the tier-3 and tier-4 cities specifically, Swiggy has on-boarded over 15,000 restaurants in the last six months.
According to a recent study by business consultancy firm Market Research Future, the market is piping hot as the online food ordering market in India is likely to grow at over 16 percent annually to touch $17.02 billion by 2023.
What Does UberEats Has To Say?
Last week, UberEats launched its operations in Cuttack, its second city in Orissa, claiming that it will partner with a number of local restaurants such as Mirchi, Biryani Box, DFC Dada’s Biryani, Burger Adda Factory.
UberEats told IANS in a recent interaction, that it is not only going to stay put in the growing food tech industry in India but is also building strong linkages with restaurant partners for a seamless delivery experience for its customers.
Bansi Kotecha, the Head of Operations, Uber Eats said “Right now, we are more focused on delivery with the restaurant partners. We are learning in the India market and making our mark in that space before we can add anything more to it,”.
What To Expect In The Future?
Currently, the deal is reportedly in the works as merger reports of Bengaluru-based Swiggy and Gurugram-based Zomato – the two biggest players in the burgeoning online food delivery market – have also resurfaced. (Reference)
According to the reports, the merger talks between the two food delivery platforms have revived as the competition is set to grow with Amazon’s reported expansion into online food delivery business in the country.