Uber may be plotting an exit from India’s food delivery market.
The ride-hailing company is in talks to sell its Uber Eats business in India to local rival Zomato, according to multiple reports citing sources familiar with the matter. A deal that would value Uber Eats’ India business at around $400 million could be announced as early as this week, the reports said.
The news was first reported by the Times of India newspaper.
Uber and Zomato declined to comment, with spokespeople for both companies saying they “don’t comment on rumors or speculation.”
Zomato is one of India’s biggest food delivery apps, valued at more than $2 billion, according to the latest available data from research firm CB Insights. The company counts Alibaba (BABA) affiliate Ant Financial as one of its major investors.
The other big contender for India’s food delivery crown is Swiggy, which is backed by another Chinese tech giant — Tencent (TCEHY) — as well as South Africa’s Naspers (NAPRF). Swiggy is valued at $3.3 billion, according to CB Insights.
Uber (UBER) Eats, which launched in India in May 2017, has been playing catch-up to its Indian rivals ever since, and Uber (UBER) CEO Dara Khosrowshahi foreshadowed the possible exit earlier this year.
“Our strategy for Eats is simple: invest aggressively into markets where we’re confident we can establish or defend a #1 or #2 position over the next 18 months,” Khosrowshahi said in the company’s latest earnings call in November, adding at a conference a few days later that Uber would “get out” if that was not the case.
Uber has been under pressure to show a path to profitability, particularly since its high-profile IPO in May, with investors concerned about the company’s history of steep losses and slowing growth. It reported a loss of more than $1 billion last quarter.
News of Uber’s potential, partial India retreat appeared to cheer investors — the company’s stock jumped more than 5% in New York on Monday.