Uber failed to compete with local Zomato in the food delivery sector in India and announced surrender by accepting the acquisition in exchange for a 9.99% stake in the company.
Zomato is one of the most important and largest food delivery company in India, Uber is suffering from high costs and losses for its Uber Eats service, and this sale will help relieve pressure on Uber International.
Uber recorded losses of about 300 million dollars in only five months from August to December last year.
Under this deal, Uber Eats in India is valued at $ 160-200 million, and this deal will make the value of Zomato range between $ 1.6 – $ 2 billion, which is about $ 1 billion or more when it collected the last financing.
Uber entered India with its food delivery service in 2017 and faced stiff competition from Swiggy, which raised $ 1 billion in new financing, raising its value to $ 3.3 billion.
Rumors surfaced a year ago from now that Uber Food Delivery was in talks with Swiggy about its acquisition, apparently not reaching a good end because of the price.
Thus, Uber has left the food delivery sector in India as a result of the strong competition it received from local companies. India is not the first country in which Uber faces such a fate, as it previously exited Russia and China in the taxi sector, but this is the first time it leaves a country in the food delivery sector, and it will continue its work in India by taxi service.