Uber may invest up to $200 million in fresh capital as part of its plans to sell the India food-delivery business, Uber Eats, to local rival Zomato, said a news report.
The latest funding by the ride-hailing company will come into the combined entity of Zomato and Uber Eats, said a report in The Economic Times.
Zomato and Uber Eats may become the biggest by the number of orders and size ahead of Swiggy, if the merger deal takes place, the report said.
“While the agreement is not signed yet, they are in a period of exclusivity, which means both parties cannot engage with others. Uber’s capital commitment can range between $100 million and $200 million, but this may be along with a few other investment funds,” the report said quoting a person in the know of the development.
Last month, Uber had put Uber Eats on the block for $500 million and Zomato was reportedly the frontrunner in the bid, said a report in Business Today.
In the Indian food delivery market, Uber Eats is at a distant third in comparison to its rivals Zomato and Swiggy that clock around 2-2.5 million orders per day while Uber Eats has only up to 3 lakh orders per day, the report said.
Last month, Uber Eats had said it was focussing aggressively on expanding its presence in India, a market that is expected to become a $15 billion opportunity over the next few years, reported PTI.
The company, which competes with the likes of Zomato and Swiggy in India, said it has added thousands of restaurant partners across the 44 cities it operates in here. “We are aggressively looking at expanding our presence in the country.
India is fundamental to Uber’s growth and we have a stable and massive rides business and we don’t see a reason why we can’t capitalise that business and grow Eats exponentially, which we have done over the last one year and we continue to do in this and next year as well,” Uber Eats Head of Operations India and South Asia Bansi Kotecha told PTI.
He added that the company has “multiple thousands of partners across every single market” it is present in domestically. Kotecha declined to comment on reports that Uber was looking at selling off the food delivery business in India, and was in discussions with multiple companies.
In the September 2019 quarter, Uber Eats’ India business dragged down the food delivery arm’s adjusted net revenue by 0.4 percent, its CFO Nelson Chai had said. Kotecha also said the food-tech industry is growing at a strong pace and is expected to reach $15 billion by 2023.
“It’s a massive market, we are (all) still collectively scratching the surface of potential of the market. There is space for all the players to be around as long as you are relevant, there is merit. We are exponentially growing and aggressively expanding, so I’m not worried about how we are placed,” he said.
— With PTI inputs
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Updated Date: Dec 17, 2019 09:25:56 IST