Uber is said to be in talks to sell its Indian food delivery business to local rival Zomato in a deal worth roughly $400m (£299m).
The ride-hailing giant is looking to offload Uber Eats in India to Zomato as part of its plan to reach profitability by 2021, according to several media reports.
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One source told the Financial Times the move followed Uber’s disappointing initial public offering (IPO) earlier this year, which had left the company needing to “think about burning cash”.
“Uber needed to be one or two in India otherwise it would pull out. I don’t think the brand will continue in India,” the person said.
Shares in Uber were up more than five per cent today to just under the $30 mark.
Zomato was founded in India in 2008 and has secured backing from Ant Financial, a fintech affiliate of Chinese conglomerate Aibaba. It is India’s second-largest food delivery firm behind Swiggy.
Food delivery is a burgeoning business in India, but the sector runs on thin margins and Uber Eats has failed to break a profit in the market.
A sale in India would be the latest move by the ride-hailing firm to slim down its international business after it offloaded its southeast Asian division to rival Grab last year.
Uber booked a net loss of $1.16bn in its third-quarter results last month, though its revenue figures came ahead of expectations.
The loss-making firm has seen its share price slide since the disappointing IPO in May, but has implemented a raft of cost-cutting measures in a bid to turn a profit by the end of 2021.
A Zomato spokesperson said the company did not comment on rumours and speculation. Uber has been contacted for comment.