Bengaluru-based online food delivery service platform, Swiggy is in discussions to acquire global cab aggregator Uber’s food delivery arm Uber Eats India, Economic Times reports. The deal will be former’s largest acquisition till date, and latter’s first divestment of its food business globally.

The negotiation is in the final stages and is expected to be completed by March. When finished, it would be one of the most significant consolidation moves in the food-tech market.

According to sources, the transaction is likely to be a share swap under which Uber would receive a 10 per cent stake in Swiggy, a Bengaluru-based company founded in 2014 with estimated last-round valuation at $3.3 billion.

The development is in line with Uber’s global strategy to cut down the losses as it prepares for a potential $120 billion public offering. Uber Eats alone is estimated to be valued over $20 billion. The Information, a US-based technology news agency reported that Uber Eats generated $1.5 billion in revenue globally in first quarter of 2018.

"It is prudent to be invested in Swiggy than burn capital competing for the same set of restaurants and consumers," a source said. "This should bring some rationality to the cash-guzzling food-delivery market," the sources added, hinting that discounts would most likely see a significant reduction post-integration.

According to sources, the food delivery hand of Uber also had discussions with Zomato but a deal couldn’t be worked out. The past two months have seen Uber Eats growing in markets of Hyderabad, Chennai and Pune. The food delivery service was launched in May 2017 and currently caters to markets in 37 cities across India.

food-tech market

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