The US cab hailing giant Uber on Wednesday morning moved to exit its 7.8% investment in food ordering firm Zomato, Reuters reported. The shares were sold for $392 million. The development comes after Zomato shares rose on Tuesday after results showed a reduction in the company’s losses. The company’s losses shrank to Rs 18.6 crore in the quarter ended June 30, 2022 from Rs 35.94 crore in the previous quarter.
We have reached out to Uber for comment on its block sale.
Uber Eats, which Zomato acquired for the stock that is now being sold, may not have been successful in India. But the stock provides a cushion to Uber’s continuing losses in India.
While some stock watchers have predicted that Zomato’s stock price may nearly double in the coming months, Uber didn’t appear to want to stick around and find out; the company may have made more had it sold its stake at the time of Zomato’s IPO, when the stock was valued at a minimum of Rs 72.
Uber’s bleeding balance sheet in India is such a thorn in its foot that media reports recently claimed that the firm was considering selling off its India operations; the company strongly denied this reporting.
As for Zomato, the company is making the most of its recent earnings and acquisitions; after acquiring Blinkit, the company is now doing a Google–Alphabet style rebranding, renaming the parent of its operations to Eternal, and appointing four CEOs to its different businesses: Hyperpure, a B2B restaurant supply firm; Feeding India, a nonprofit; Blinkit; and finally Zomato itself.
A Zomato spokesperson declined to comment.