UberEats and Zomato Case Study

On 21st January 2020, the only news that was visible was Zomato bought Uber India. The was in progress since June 2019 and it finally reached its destination for $350M i.e. RS. 2,485cr. the deal was all-stock- transaction. This means that Zomato did not pay the monetary price for the deal but gave an equal share in the company. UberEatsnow holds 9.99% of share in Zomato. People trying to operate UberEatswere redirected to Zomato’s page. Although Zomato will not revive the employees from Uber Eats, this does not include delivery boys as they are not employees but a partner.

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Zomato was introduced to India in the year 2008 by Deepinder Goyal. In 2019 Zomato was located in over 24 countries and 10,000 cities. On the initial stage of Zomato Info Edge India was the major investor and shareholder with 57.9% share in Zomato. Info Edge India was the major shareholder in Zomato till 2018; later in the third round of funding, Zomato raised over $210 million from Alibaba’s payment affiliate Ant Financial. Ant Financial received an ownership stake of over 10% of the company as part of the round, which valued Zomato at around $2 billion. Zomato had also raised an additional $150 million also from Ant Financial earlier in 2018. Zomato has acquired around 12 startups globally since 2014. This acquisition includes a startup business that provided drones for an undisclosed amount; to this Zomato had to say this will help them in improving technically by delivering food through drones.

 

UberEatswas introduced by its parent company UBER in the year 2014. Uber Technologies most commonly known as UBER is an American multinational ride-hailing company offering multiple services from travelling from one place to another. UberEatswas introduced in India in the year 2017 and by the end of 2018, it was already in conversation with Swiggy to takeover uber eats. Uber had faced a huge loss of $1 billion in the previous year as of in November and cut a hundred jobs. Letting UberEats go would help Uber recover their losses in the market. It is observed that Uber has been in talks with other organization to take over its loss-making company in other nations too.

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UberEatswas third in the race of food delivery apps in India. Swiggy was and still is a huge market competitor. While Swiggy receives daily orders of 1.4 million every day; Zomato receives 1.2 million; whereas on the other side UberEatsreceived only 4 lakh orders per day. Successful completion of this deal will be led to an increase in the market share of Zomato up to 50-55%. Also, UberEats had did not have much of the northern market but it had around 30% market hold on the southern side. It is assumed by the experts that this deal will result in 90% of UberEats customers to switch to Zomato but, there is a higher chance of switching to Swiggy.

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