Uber Eats Close to India Exit: To be Reportedly Acquired by Swiggy

The deal will give Uber Eats a 10 percent share in Swiggy.

(Photo: The Quint)

Uber Eats made its debut in India in May 2017 but has failed to make its mark, given the market position of Swiggy and Zomato in the country. Now, in what is being said as one of the biggest acquisitions in the food industry, The Economic Times reported that Uber is in the final stages of negotiations to sell its India business to Swiggy, citing people close to the deal.

The deal is expected to be finalised next month. It will be Swiggy’s biggest acquisition yet and Uber’s first divestment of its food business.

The deal is likely to give Uber around 10 percent stake in Swiggy.

ET also reported that this move by Uber is part of its strategy to cut down on losses to prepare for its $120 billion public offering.

Uber Eats generated $1.5 billion in revenue globally in the first quarter of 2018, ET cited US-based technology news portal, The Information.

Another factor that has led Uber Eats to give in to the dying demand is that in order to compete with Swiggy and Zomato, Uber Eats has to offer heavy discounts, leading to huge cash burns for the company.

Uber Eats India racked up a cash burn of around $25 million on an average 9 million orders a month, The Economic Times report said.

Uber's cab-hailing rival Ola also, in December 2017 acquired Food Panda, in order to penetrate the food-delivery sector of the country.

(With inputs from The Economic Times.)