Currently, Swiggy is in discussions with Uber to buy its food order and delivery business. Uber has ideas to go in for a public offering and this move is reportedly part of that overall plan and to show a lightly healthier financial picture. Reportedly Zomato too is in the competition for UberEats.
While the report states that the deal may include a share swap where the shares of the acquiring firm being allowed to Uber for the value of UberEats agreed upon. Moreover, in India’s highly competitive FoodTech market, UberEats is a distant third, servicing roughly 150,000 to 250,000 orders a day. Swiggy and Zomato do multiple times of this, but the company seems to be doing better than Foodpanda run by a competitor in the ride-sharing business, Ola.
Besides Uber has had a similar experience in some of the other markets it had entered, like China and Russia where it eventually sold its stakes and almost in all cases to competitors. Obviously the current move to go in for an IPO and to sell off UberEats that clocks a regular loss of $15-$20 million each month, might be part of a larger plan going ahead. It may be relevant to know Swiggy and Zomato keep falling around twice this amount each month and they are able to rack up and the hotels and eateries offering a little more, operations may break even.