350 million dollars.
Or, Rs 2,485 crore.
That’s how much online food delivery and restaurant discovery platform Zomato has paid to acquire the Indian operations of Uber Eats, Economic Times reports.
Two people close to the deal told ET that the US-based company, Uber, will hold around 10 per cent in the Gurgaon-based Zomato and that Uber Eats will cease to be a separate brand and all of the users will be redirected to the Zomato App.
The paper also reports that the 100 executives or so associated with Uber Eats will have to either be laid off or reallocated to Uber’s other verticals considering that Zomato will not absorb Uber Eats’ team in India.
This deal will give Zomato an edge over Swiggy, its main competition. “For Zomato, buying the distant third player helps it consolidate the market and puts it ahead of its arch-rival Swiggy. It is one less competition for the company to deal with,” said a source to ET.
“In parts of Tamil Nadu, Kerala, and Madhya Pradesh, Uber Eats has a stronger foothold compared to Zomato with an about 30% market share,” an Uber executive, who didn’t want to be named, told ET.
“Uber selling UberEats to Zomato is a sign of consolidation which happens typically to achieve leadership post companies achieving sizeable aggregation. Zomato now has more than 50% share in food delivery market with this deal. The strength of delivery network of UberEats will benefit Zomato in growing its market share in South India and hence compete more fiercely with Swiggy nationwide. Startups addressing one major pain point, focusing on it full time to scale and achieve a certain level of critical mass becomes an important milestone and can help turn into a unique selling proposition for a larger player to strike a deal with them to increase its market share and hence create value and future exit opportunities for its investors,” said Yagnesh Sanghrajka, Chief Financial Officer at 100X.VC.