Zomato, a company that delivers food to customers online, has acquired Uber Eats India. Under the deal, Uber will get a 9.99 percent stake in Zomato. Zomato CEO Deepinder Goyal stated that “Zomato Company is number one to offer its food delivery service. We take pride in serving over 500 cities in India. This acquisition by us has further strengthened Zomato’s position. “
Deepinder Goyal, in an interview with economic times, revealed several things about the benefits of acquiring uber eats. He revealed that Zomato would gain about 20% of the new users every month. This gain would further help in getting 25% extra orders. Moreover, the acquisition will also help Zomato gain a firm grip on the south Indian market. This step will help get 500 exclusive restaurants present in southern India to move towards Zomato as their primary platform for online food delivery.
On the question of cash burn, he stated: “From a cash burn point of view, we will be the same cash burn, which is down to $15 million per month, from $45 million in March last year.”
On the question of why he gave away a vast amount of share of the company, Deepinder stated that “It’s a trade, you give value if you think they will drive more value, so there is no question of giving more!” On stating about the uber gold membership users, these users got shifted from uber to Zomato. If these users wish to purchase gold membership, they are free to do. As a benefit of change, these users will likely get three months of free Gold membership. However, this may result in Zomato Gold revenue going down by 5-6% but for a short period.
Deepinder also mentioned the company’s economic stability. According to him, There will be a short-term spike of $3-5 million in revenues to attract over the customer base to us, but that will be one-time. Zomato + Uber Eats on 21st January registered 6% more than the combined order volumes as customers moved to Zomato’s platform.