Uber cuts losses in food business in India, with sales at Zomato

BENGALURU (Reuters) – Uber (UBER.(N) the sale of the loss-making online food ordering business in India with its local rival to Zomato, in return for a 9.99% stake in the startup, backed by China’s Ant Financial.

FILE PHOTO: An Uber Eats, food delivery, courier service with a bike in the city centre of Kiev, Ukraine on the 9th of September 2019. REUTERS/Valentyn Ogirenko

Zomato, valued at approximately $3 billion, after raising money from a Tad this week, but we are about to take on Uber Eats, the activities of the week.

Since its launch in India in 2017, if the Uber Eats has been struggling to gain market share is a distant third, and Tencent Holdings ‘ (0700.HK)-back-Swiggy and Zomato.

All three have also spent heavily on promotions and discounts to attract customers in a highly competitive market.

Uber’s chief financial officer, Nelson Chai, said that the gesture was a demonstration of his decision to leave the Uber Eats in South Korea in October, 2019, “is our commitment to take a hard look at Dining markets, where we do not have a path to leadership.

The San Francisco-based company, which has promised to be profitable at the operating level by the end of 2021, have been trying to sell it to India to Eat the business for a year, two sources familiar with the discussions told Reuters.

The previous discussions have taken place with Swiggy for a similar deal, but that fell through because of the valuation, and rules and regulations, the two of them, he said. Uber and Swiggy did not respond to requests for comment.

Uber Eats the India operations contributed only about 3% of the gross bookings as the company is worldwide in the first nine months of the previous year, while accounting for one-quarter of adjusted operational losses, the company said.

The unit is in India, with a net loss of $61 million for the three months to Sept. 30 on revenue of $20 million, the company said in a filing with the U.s. Securities and Exchange Commission.

Zomato had reported a net loss of $294 million, for the years up to and including March 2019, as Swiggy with a net loss of $330 million.

The sale will allow Uber to cut its losses and still maintain an interest in and a market that is expected to be valued at $15 billion by 2023.

Regardless of the brand consultant Harish Bijoor said the deal would also allow Uber to focus on its strengths. “The need to hold on to her power, in terms of an aggregator of cabs,” he said.

Zomato orders per month increased by 10 million, from 38 million to 40 million, it was clocking before the deal, a source familiar with the deal said. Swiggy will also receive approximately 40 million monthly active ones.

The acquisition does not guarantee that all Uber is Eating the customers will move to Zomato. Online food delivery, customers have a tendency to favor the companies that have the best deals in the market, according to research.

Consultancy Frost and Sullivan said that, even after the purchase, Swiggy is perhaps the country’s leading player in the market.

“Swiggy is the diversification into a wide variety of last-mile delivery of services, including storage, packaging, home meal deliveries, it is anticipated that the compensation for any losses incurred by the Zomato’s acquisition of Uber will Eat it,” he said in a note.

Reporting Chandini Monnappa, Nivedita Bhattacharjee and Rama Venkat, Bengaluru; Writing by Sayantani Ghosh and Nivedita Bhattacharjee; Editing by Christopher Cushing, Muralikumar Anantharaman and john Harvey

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