Uber exits Zomato investment for more than $390 million

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Uber’s ride with Zomato is over. The ride-sharing company on Wednesday sold its 7.8% stake in the loss-making food delivery company for more than $390 million, a person familiar with the matter said, becoming the latest major institutional investor to leave the Indian company. .

The US company, which reported a net loss of $2.6 billion in the second quarter earlier this week, sold its entire stake in Zomato on Indian stock exchanges for $392 million, the source said, requesting anonymity as the case is not public.

The sale comes a day after Uber said it had assumed an unrealized loss of $707 million on its investment in Zomato during the first half of this year and the quarter that ended June 30, 2022.

Uber has sold its local food delivery business in India to rival Zomato for $206 million, after years of aggressive attempts to compete with local food giants Zomato and Swiggy. As part of the deal, Uber acquired a 9.99% stake in the loss-making Indian food delivery startup.

Uber did not respond to a request for comment.

Zomato shares have performed poorly throughout this year and dropped to a record low last week after the end of the lock-up period for investors who held stakes in the company prior to the IPO.

It fell as low as 9% on Wednesday morning until recovering to 52.60 Indian rupees (67 cents) each, giving the company a market capitalization of $5.25 billion, far below the $13.2 billion valuation it accrued on its debut day a year ago.

Zomato said on Tuesday that it aims to break even EBIDTA by the fourth quarter of next year and has downgraded its investment in Blinkit fast trading from $400 million to $320 million.

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