Swiggy in talks to buy Uber’s India food delivery business
Uber Also Talking To Zomato For The Share Swap Deal
Madhav Chanchani & Sidhartha TNN
Bengaluru/New Delhi:22.02.2019
India’s online food delivery sector is headed for consolidation as ride-hailing major Uber is looking to sell its Ubereats business in the country in run-up to its public offering, according to three sources familiar with the development. The San Francisco-based company is in talks with Bengaluru-based Swiggy and has also been in discussions with Gurugram-based Zomato for the deal, as the two rivals are competing for market leadership in the space, said these sources.
The transaction will be structured as a share-swap deal, with Uber taking shares in the buyers for the agreed upon valuation. “Swiggy is currently leading the discussions but Zomato is also in contention as well,” said one of the sources mentioned above, adding that the valuation and share-swap ratios are being discussed.
Ubereats’ India business is currently doing about 1,50,000 to 2,50,000 deliveries a day with gross sales run rate of about $200-250 million, according to multiple industry executives.
Both Ola and Zomato do four-five times more deliveries than Ubereats, said these executives.
This makes Ubereats a contender for a distant third spot in the market again rival ridehailing company Ola-owned Foodpanda. “The Ubereats India business may get valued at about two-to-three times their gross sales,” said one of the sources mentioned above, pegging the valuation at over $500 million.
“We do not comment on rumour or speculation,” said an Uber India spokesperson. When contacted, Swiggy and Zomato spokespersons declined to comment.
The transaction will help Uber cut down loss from the India business as it heads for a public offering. Uber, which has already made a confidential filing with US regulators for an IPO, reported loss of $1.8 billion for 2018.
“Ubereats was losing about $15-20 million a month in India late last year,” said an investor tracking the space.
India is one of the markets where Uber still sees high loss even as it has sold off operations in China, Russia and Southeast Asia to rivals. While there have been rumours of a potential consolidation with Ola, as both companies share SoftBank as the largest shareholder, these talks have not progressed. This has forced Uber to look at other alternatives. Ubereats had said last year it is adding 4,500 delivery personnel a week and 100 restaurants a day in the country.
› TPG Growth in talks to invest $40m in Nykaa, P 20
Uber Also Talking To Zomato For The Share Swap Deal
Madhav Chanchani & Sidhartha TNN
Bengaluru/New Delhi:22.02.2019
India’s online food delivery sector is headed for consolidation as ride-hailing major Uber is looking to sell its Ubereats business in the country in run-up to its public offering, according to three sources familiar with the development. The San Francisco-based company is in talks with Bengaluru-based Swiggy and has also been in discussions with Gurugram-based Zomato for the deal, as the two rivals are competing for market leadership in the space, said these sources.
The transaction will be structured as a share-swap deal, with Uber taking shares in the buyers for the agreed upon valuation. “Swiggy is currently leading the discussions but Zomato is also in contention as well,” said one of the sources mentioned above, adding that the valuation and share-swap ratios are being discussed.
Ubereats’ India business is currently doing about 1,50,000 to 2,50,000 deliveries a day with gross sales run rate of about $200-250 million, according to multiple industry executives.
Both Ola and Zomato do four-five times more deliveries than Ubereats, said these executives.
This makes Ubereats a contender for a distant third spot in the market again rival ridehailing company Ola-owned Foodpanda. “The Ubereats India business may get valued at about two-to-three times their gross sales,” said one of the sources mentioned above, pegging the valuation at over $500 million.
“We do not comment on rumour or speculation,” said an Uber India spokesperson. When contacted, Swiggy and Zomato spokespersons declined to comment.
The transaction will help Uber cut down loss from the India business as it heads for a public offering. Uber, which has already made a confidential filing with US regulators for an IPO, reported loss of $1.8 billion for 2018.
“Ubereats was losing about $15-20 million a month in India late last year,” said an investor tracking the space.
India is one of the markets where Uber still sees high loss even as it has sold off operations in China, Russia and Southeast Asia to rivals. While there have been rumours of a potential consolidation with Ola, as both companies share SoftBank as the largest shareholder, these talks have not progressed. This has forced Uber to look at other alternatives. Ubereats had said last year it is adding 4,500 delivery personnel a week and 100 restaurants a day in the country.
› TPG Growth in talks to invest $40m in Nykaa, P 20
No comments:
Post a Comment