Zomato in advanced talks to acquire UberEats for $500 million: ET report

While the final deal size could vary, reports suggest that Uber may also invest in Zomato’s on-going funding round.

Atom FoodTech

Ride hailing major Uber’s food delivery arm seems to be on sale again. After earlier reports suggested that Swiggy was looking at taking over UberEats, Economic Times now reports that Zomato has now emerged a strong contender to take over the food delivery arm.

It has been months since one has been hearing of UberEats being taken over by either Swiggy or Zomato and the last reports had claimed Swiggy was likely to be the suitor. The only hitch, it was reported earlier, was the valuation which Uber was willing to accept. The recent developments at Uber, after its IPO failed to perform to expectations, could have triggered the decision by Uber to bring the issue to a close.

There is no official confirmation yet on the development from either Uber or Zomato, but ET quotes sources as saying that a price of $500 million is now being quoted.

The deal may also include Uber making an investment in Zomato, as part of its on-going funding round of $500-600 million.

For Zomato, acquiring UberEats will come as a shot in the arm in its ongoing tussle with Swiggy for market share. The markets in the South, where UberEats does better, Zomato will get strengthened. The startup hopes to raise $500 to $600 million from existing investors like Ant Financial (of the Alibaba Group) and other investors. The likely evaluation of Zomato for this new funding round could be $3 billion.

Uber sold its South Korean food delivery business only a couple of months back. The company claims it would like to remain in the market only if it figures among the top two players in the field in the market.

In the Indian context, UberEats is far below the top two, Swiggy and Zomato in terms of numbers. While these two rivals manage to service around 2-2.5 million orders per day, countrywide, UberEats does just 250,000 to 300,000. Even when compared on the average order value, UberEats clocks just around Rs 140 ($2) per order, Swiggy and Zomato manage to bill an average of Rs 210-Rs 300 ($3-$4) per order.