Uber has put its food delivery business UberEats on the block again for a price tag of $500 million. Zomato is learned to be the frontrunner in acquiring the food delivery business. The current round of negotiations involves a stock deal with Uber, additionally, investing in the homegrown company's ongoing $500-600 million round.
The talks with Zomato have been going on for several weeks, as mentioned in a report in Times of India. Uber has also sent feelers to Zomato's rival Swiggy as well but those talks are yet to take shape.
"Talks with Zomato are now progressing towards a term-sheet and discussions are more realistic this time around," said a person in the know to the daily.
When it comes to the Indian food delivery market, UberEats is a distant third in comparison to its rivals Zomato and Swiggy that clock around 2-2.5 million orders every day. On the other hand, UberEats only clocks 2,50,000-3,00,000 orders per day. As for the value of the order, on an average UberEats witnesses $2 per order as compared to $3-4 per order for Swiggy and Zomato.
The deal appears to be an attractive one for Zomato that has been looking to crack Swiggy's stronghold in the southern states. It will also help push its market share over Swiggy and entice new strategic partners to come onboard.
The talks of UberEats acquisition come amid Zomato's efforts to raise capital. Existing investor Ant Financial has already given its nod for a $200 million infusion, as mentioned in the report.
Uber, on the other hand, that saw a lacklustre IPO in May this year, has been struggling to sustain its food delivery business in India. It plans to focus in markets where it can be the first or the second player.