Info Edge Says Uber Deal Will Help Zomato Take Pole Position
“Once (Uber) deal is done and traffic starts to move to Zomato, we will be No. 1 in terms of competitive landscape,” – CFO Thakkar
Info Edge (India) Ltd., the job, property and matrimony portal which has invested in Zomato, said the food tech startup’s acquisition of smaller peer Uber Eats will give it an edge over rivals in India’s fast-growing food delivery market.
“Once the (Uber) deal is done, and traffic starts to move to Zomato, we will be number one in terms of competitive landscape,” Chintan Thakkar, chief financial officer at Info Edge, Zomato’s second-largest shareholder, told BloombergQuint in an interview. Volume gain and a rise in market share in the food delivery business will give Zomato an edge, he said.
Zomato will acquire Uber Eats from Uber Technologies Inc. for $172 million, Bloomberg reported quoting people aware of the matter. Uber agreed to offload the business in return for 9.99 percent of the Indian startup and as part of the deal, the U.S. company will shutter operations but direct all restaurants, delivery companies and diners to Zomato.
The meal delivery market in India—which according to Redseer is expected to nearly quadruple to $2.5 billion by 2021—is dominated by Naspers-backed Swiggy and Alibaba affiliate Ant Financial-backed Zomato. The market, according to Statista, generated $7.7 billion in annual revenue last year.
Zomato is now looking to increase the number of users on its platform and lower cash burn to improve its unit economics. The company, in its half yearly report for the financial year ending March 2020, said its cash burn reduced by 60 percent over the last year between April and September.
After the deal, Thakkar said, Zomato’s cost structures would also improve.
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