Being the Food Delivery Arm of an international ride-hailing platform, Uber Eats has planned to sell the Indian business to its prime rival Swiggy. The deal is expected to take place in the next month. Till date, it is going to be the largest acquisition of Swiggy. It is also the first global divestment of food business by Uber. The transaction will be the share swap. As disclosed by the sources, Uber will retain a 10% stake of Bengaluru-based Company, the last value of which is $3.3 billion.
As it is preparing for a public offering of valuation $120 to $150 billion, the global strategy of Uber is to cut down the losses. Whenever considered as the ride-hailing giant, Uber alone estimates a value over 20 billion dollars. In accordance with The Information, the US-based tech news portal $1.5 billion revenue of this $20 billion is achieved by the company at the beginning of 2018.
A close source of the deal said that it’s prudent to invest in Swiggy than burning the capital in competing for the same sets of consumers and restaurants. It will bring the rationality in this cash guzzling market of food delivery. The person also added that it is expected that the discounts will significantly reduce post-integration.
Taken aback a few years ago, both Gurgaon-based Zomato and Swiggy were playing their integral role in raising the capital. Later, Ola’s Foodpanda and Uber Eats had heightened the competition which leads to high cash burns by all these companies as well. Uber Eats had talked to Zomato earlier but that had been fallen off.