Putting an end to all speculation on the deal size of Zomato and Uber Eats India, regulatory filings revealed that the Ant Financial-backed company had paid $206 million in stock to acquire Uber’s food delivery business in India.
This is almost $150 million less than the estimate of $350 million made by media reports last month.
According to regulatory filings by Uber with the SEC (The Securities and Exchange Commission), Zomato allotted 76,376 Non-Voting CCCPS to Uber India Systems, at a face value of Rs 9,000 with a premium of Rs 1,71,153, making the total issue price Rs 1,80,153 per share.
The filings further revealed that the estimated fair value of the consideration received is $206 million. While the investment was valued at $171 million, the remaining $35 million was received as a reimbursement of goods and services tax receivable from Zomato.
Following this acquisition, Uber Inc will get a 9.99% stake in the Gurugram-based company in an all-stock-deal.
While Zomato was valued at $3 billion after it raised $150 million in January, the current transaction with Uber seems to value its 9.99% stake lower.
There was a valuation cut since Uber Eats didn’t receive the same rights such as liquidation preference and right to information like a primary investor, said an ET report citing a Zomato spokesperson.
The deal is on the lines of Didi Chuxing, where Uber Eats holds an equity stake after selling its China’s business to the country’s ride-hailing giant.
It essentially means that Uber Eats will not have a representative on the management team or board of directors of Didi Chuxing or in this case — Zomato. And subsequently it will not participate in the day-to-day management or partake in the actions taken by their board.
Following this acquisition, the combined entity of Zomato and Uber Eats India command close to a 55% market share in the food delivery segment. In the past couple of years, Zomato’s arch-rival Swiggy had been leading the space and currently clocks over 50 million deliveries monthly.
The Bengaluru-based firm had recently raised $113 million in Series I round led by Naspers, Meituan and Wellington Management.
This consolidation has now made this a two-horse race in the food delivery space between Swiggy and Zomato. Both companies are now working towards improving their financial health in ongoing financial year.
