The consolidation in the global food delivery market has arrived in India as well.
Zomato said Uber Eats in India would discontinue operations and direct restaurants, delivery partners, and users to the Zomato platform, effective immediately – a change that already reflects on the Uber Eats app. The deal value is estimated at around $350 million.
Uber Technologies Inc’s food delivery business Uber Eats struggled to take off in India after launching in 2017.
The main reason for this is because Zomato and other local rival Swiggy dominated the food delivery market in India.
While the Indian business had grown significantly for Uber Eats, touching 12% of the food delivery share, it had accounted significantly less for the overall global bookings for the food division.
The division is believed to be making over 25% global losses in EBITDA.
Zomato had, on January 10, announced that it has secured $150 million in fresh funding from Ant Financial, a subsidiary of China-based giant Alibaba.
The latest round of funding in Zomato, which currently values the company at over $3 billion, is part of a $600 million funding round announced by Zomato CEO Deepinder Goyal at a Delhi event in December.
Zomato is an Indian restaurant aggregator and food delivery startup founded by Deepinder Goyal and Pankaj Chaddah in 2008.
The year has started on an interesting note for the food tech industry. While last year was about the dominance battle between Bengaluru-based food tech unicorn Swiggy and Zomato, it seems like we will see a repeat of the same this year.
One more disruption waiting to happen in India with Amazon set to make its entry into the food tech space.
Notwithstanding the ongoing slugfest between restaurant owners and food-delivery app companies like Zomato on their steep discounting model, this market is expected to be a $17 billion opportunity by 2023, recording an annual growth rate of 16%, according to a report by business consultancy firm Market Research Future.
Zomato is the most promising investment of Infoedge. Zomato and the food delivery business overall is tremendously scalable in India but the key questions investors are waiting for a long time is that will Zomato turn profitable soon?
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