Uber’s Food Distribution
Business, Uber Eats, is gearing up to sell its Indian operations to a rival
food distribution company, Swiggy in the country.
According to a report by The Economic Times, the
transaction is expected to be closed in March, citing privatization of three
people for development and it will mark the biggest purchase for Swiggy. It
also marks the first sale of Uber’s food business worldwide. Under the deal,
sources told The Economic Times that Uber would get a 10 percent stake in Swiggy,
which is worth 3.3 billion dollars.
To reduce the deficit for the potential initial
public offering of Uber, the move mounts with the aim of Uber. The value of
Uber Eats is more than $ 20 billion, which brings revenues of $ 1.5 billion in
the first quarter of 2018, the report said. A source told the paper, “It
is sensible to invest in Swiggy rather than burn capital to compete for the
same set of restaurants and consumers.” This person said, “Some
rationality should be brought in the cash-guzzling food-delivery market,”
the person said that the discount is likely to reduce post-integration.
Along with Swiggy, the opponent Zomato is
successfully raising the venture fund and the customer is aggressively
following. At the same time, another delivery service, Uber Eats and Foodpanda,
is offering big discounts, as a result the companies are burning to compete
through cash. Uber Eats, for example, burns around $ 9 million a month for $ 25
million, in the meanwhile Swiggy burns approximately $ 40 to $ 45 million a
month. Paper note Uber had discussed with Zometo, but nothing came of it.
The sale of Uber Eats in India also comes because
its opponent Ola has pulled back on its food business, which operates under the
name of Foodpanda, and has increased the supported marketing and customer
acquisition costs to almost two-thirds.
