Mumbai: Indian online food delivery and restaurant discovery startup platform Zomato acquired ride-hailing giant’s Uber Eats on Tuesday in an all-stock transaction.

Zomato on January 21 said it has acquired the Indian business of Uber Eats in an all-stock deal that will give Uber 9.99% stake in the Zomato business.

Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats app to the Zomato platform, effective Tuesday, a statement said.

Uber Eats will cease to exist as a separate brand locally and users on its platform will be redirected to Zomato’s app, said one of the people privy to the details.

The move is aimed at cutting losses at the ride hailing company’s food delivery business in India that has been a drag on the company’s earnings.

Zomato will not absorb Uber Eats’ team in India. This means around 100 executives will either be reallocated to Uber’s other verticals here or laid off.

“We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category,” Zomato CEO Deepinder Goyal said.

 

Zomato is backed by Alibaba affiliate Ant Financial, which recently agreed to invest up to $150 million at a pre-money valuation of $3 billion, according to official filings from Zomato-shareholder Info Edge.

Based on that valuation, Uber’s stake in Zomato would be worth around $300 million. Uber declined to comment on the deal’s value.