Ride hailing service Uber acquired a 9.99% stake in India-based restaurant listings and food ordering platform developer Zomato today as part of the latter’s acquisition of its local Uber Eats business.
Founded in 2008, Zomato began life as an online restaurant listings and reviews platform before expanding into food delivery and facilitating payment in restaurants. It has 70 million monthly users and its network contains some 1.5 million restaurants across 24 companies.
Uber Eats India formed part of the wider Uber Eats service, which makes use of Uber’s drivers to pick up food deliveries that were ordered through its app. It will be discontinued in India from today and users redirected to Zomato.
Zomato raised $150m from Ant Financial, e-commerce group Alibaba’s financial services affiliate, at a reported $3bn valuation earlier this month, which would value the size of Uber’s stake in the company at $300m.
Dara Khosrowshahi, Uber’s chief executive, said: “Our Uber Eats team in India has achieved an incredible amount over the last two years, and I could not be prouder of their ingenuity and dedication.
“India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success.”
The structure of the transaction mirrors earlier deals where Uber divested regional ride hailing businesses in regions such as China, Southeast Asia and Eastern Europe to regional competitors in return for equity stakes, in effect hedging its bets.
The Ant Financial investment was part of an ongoing series C round expected to close at $500m. Zomato’s other investors include online classifieds operator Info Edge and food delivery platform developer Delivery Hero.
