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Uber Exits Indian Food Delivery Company Zomato by Selling 7.8% of its Stock for $390 Million

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According to infographics from the Bombay Stock Exchange, Uber which holds approximately 10% shares in Zomato sells more than half of it or approximately 7.8% stake for approximately $390 million. It gained a lot of public as well as business attention when Uber exited Zomato’s investment for over $390 million. According to the data, the San Francisco-based company holds 612.2 million shares, or 7.8% of shares in Zomato, which it sells for 64 US cents per share.   

This represents an exit of Uber from the Indian Food Delivery Company, which sold its Uber Eats units on a large scale in the year 2022 in return for a stake in the startup. Apart from Zomato, Uber also holds stakes in Didi Global, Grab Holdings, and other companies where it is not possible for it to compete with its local rivals.  

Mandeep Singh, a Bloomberg Intelligence analyst, wrote that “selling the stake at this point of time may be a way to exit from more unprofitable markets where there is no reasonable profit after putting a lot of effort into it.” This disinvestment process resulted in an inflow of cash into Uber, raising its valuation to $3.1 billion. This is the largest valuation of Uber since 2018. 

Uber reported that in the second quarter results, it incurred huge losses from its stakes in Grab, Aurora Innovation, and Zomato, which amounted to $2.6 billion. CEO Dara Khosrowashahi says that after incurring these losses, the company decided to monetize non-strategic or non-profitable stakes over time.

However, Uber was able to jump over these losses and incur a gain thanks to the efforts of analyst Raymond James. He always upgrades the stock market and tries to outperform, citing strong momentum in the company’s stake business and always adds to the value of the company. 

Uber is an American-based company that allows a user to book a car or driver just by using their phone. Its headquarters are located in San Francisco, which regulates its working in more than 70 countries and over 10,500 cities. Uber works as a bridge between the taxi driver and the customer, helping both to fulfill their needs.

Apart from this, it provides various other facilities as well, such as delivering food to your doorstep, delivering packages to your doorstep, courier services, and freight transport. The company’s total valuation at present is $64 billion, with over 29,000 employees working there. 

The relationship between Zomato and Uber was not so long. In January 2020, Zomato acquired Uber Eats in a non-cash deal where it was decided among the companies that, in return for this acquisition, Uber would receive about a 10 % stake in Zomato. In 2022, due to the huge losses incurred by Uber from its stake in Zomato, it sold more than 60 of the stakes it held. The merger, partnership, or business deal, whatever it was, did not last for long. 

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