Uber Technologies Inc (NYSE:UBER) plans to divest UberEat’s India business to the local player – Zomato. It is part of the cost-cutting measure of Uber worldwide. The India business of UberEat’s is valued at $400 million. Uber eyes a stake in Zomato and plans to invest up to $200 million in the eleven-year-old company. The deal is still in the negotiation stage and expected to be finalized by the end of this year. If the deal is through, the American giant will feel a sigh of relief. The company has been negotiating with Swiggy and Zomato to sell its India business.
Uber has unveiled the food delivery service in the year 2017. The ride-sharing company planned to win the customers by offering discounts. However, it has never been a threat to Zomato and Swiggy. Both Swiggy and Zomato serve over 1 million customers every day.
According to the available information, the daily orders for UberEats are around 600,000. UberEats is facing troubles in the recent quarters after Deepak Reddy, Head (operations), Bhavik Rathod, Head (Southeast Asia, and UberEats India) left. Dara Khosrowshahi, Chief Executive Officer of Uber, during his trip to India in October 2019, said Uber is committed to its Indian business. During an earnings call, Uber CEO said the company is facing competition from the local players. He said Uber will continue to conduct business in the food delivery.
In August 2019, Dara said the company intends to be at number one or two in the market. But, it is at number three in the food delivery segment in India. It faces competition from strong players in India. The company projected a negative growth for the UberEats’ business in India from August till the end of this year.
Zomato expects to close the financing of $600 million
Chief Executive Officer and Co-founder of Zomato, said last month that the company expects to close another round of financing of $600 million from Ant Financial of China.
Zomato recruits a new finance head
Zomato recruited a new finance head last month. The board of Zomato has approved the appointment of Akriti Chopra as the finance head. She has been leading the legal and finance teams for the past eight years.
