Food delivery giant Zomato is the frontrunner in a race to acquire Uber's food delivery arm UberEats, according to a report by The Times of India.
According to the report, the size of the deal is still under negotiations but the San Francisco-based company has quoted a price of $500 million for UberEats. The negotiations include a stock deal and Uber might invest in Zomato’s next financing round.
“The talks with Zomato are now progressing towards a term-sheet and discussions are more realistic this time around,” a source told the newspaper.
The news of the development comes as Uber is under pressure to reach profitability after its lacklustre IPO. Its food delivery business has been a drag on global margins. In a recent analyst call, the company had said that it will exit markets with low returns on investments and focus on markets where it can be the first or second player. In September, UberEats shut shops in South Korea.
Earlier, Uber had approached Swiggy but the talks failed due to differences overvaluation. It was also in talks with ecommerce giant Amazon for its food-delivery business in India, before it listing in US markets this year, the report said.
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