Ride-hailing giant announced Tuesday that it sold its food delivery business in India to its rival Zomato in an all-stock deal. The transaction brings Uber a 9.99% stake in the Indian restaurant aggregator and food delivery start-up.
Uber Eats is now Zomato
Zomato is sponsored by Alibaba’s China-based affiliate Ant Financial, which recently shown its intent to invest to up to about $150 million at a pre-money valuation of around $3 billion, as revealed by official filings from Zomato-shareholder Info Edge.
Based on that valuation, Uber’s share in Zomato would be worth roughly $300 million. Uber claimed to comment on the deal’s value.
Uber East has confirmed that it will discontinue operations starting Tuesday and that it will forward restaurants, delivery partners and consumers to the Zomato app.
“India remains an outstandingly important market to Uber, and we will look forward to investing in raising our local Rides business, which has been clear category leader,” said Dara Khosrowshahi, CEO Uber.
The tech firm remained under pressure from investors to turn its operations around. Last year, the company disclosed a $5.2 billion loss in its second-quarter earnings and expelled hundreds of employees during 2019.