Uber Has Sold its India Food Delivery Business to a Rival

Uber announced this week that it has sold its food delivery business in India to a local rival called Zomato.

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

The sale was an all-stock transaction and gives Uber a 9.99% stake in the Indian restaurant aggregator and food delivery start-up.

Consequently Uber Eats will discontinue operations and direct restaurants, delivery partners and users to the Zomato app starting Tuesday.

Uber’s stake in Zomato would be around $300 million.

“India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader,” CEO Dara Khosrowshahi said in a statement.

In its first-half report for fiscal 2020, Zomato revenue was $205 million, soaring from $63 million in the same period a year ago.

Disclaimer: We have no position in Uber Technologies Inc. (NYSE: UBER) and have not been compensated for this article.