Swiggy in talks to buy Uber’s India food delivery business

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New Delhi, Feb 22: 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 the 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 in contention as well,” said one of the sources mentioned earlier, adding that the valuation and share-swap ratios are being discussed.
UberEats’ India business is currently doing 150,000 to 250,000 deliveries a day with a gross sales run-rate of $200-250 million, according to multiple industry executives. Both Swiggy 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, ahead of rival ride-hailing company Ola-owned Foodpanda. “The UberEats India business may get valued at two to three times their gross sales,” said one of the sources mentioned earlier, pegging the valuation at over $500 million.
“We do not comment on rumour or speculation,” said an Uber India spokesperson.