Zomato Offloads UAE Biz To Foodtech Investor Delivery Hero

Berlin-based food delivery player Delivery Hero has announced that it has acquired United Arab Emirates (UAE) business of Gurugram-based food delivery and restaurant discovery company, Zomato.

In a statement, Delivery Hero said that the acquisition will add 1.2 Mn monthly orders and $2 Mn monthly revenue to Delivery Hero’s Middle East and North Africa region business and will strengthen its leadership position in the UAE.

Niklas Östberg, CEO, Delivery Hero, said, “Zomato has built a successful food delivery business in the UAE and India on the back of its restaurant search and discovery app and website. The acquisition will allow us to further improve our service to customers in the UAE. We are also excited to become a shareholder in Zomato’s rapid food delivery growth story in India and share our learnings.”

The acquisition will be fully funded by an acquisition facility. To Inc42’s email query, Zomato declined to comment on the development.

Moreover, Delivery Hero also said that it will participate in Zomato’s latest funding round by investing $50 Mn into Zomato’s global business picking up a stake to become a Top 10 shareholder. It will also enter into a material operational partnership agreement with Zomato.

In the statement, Deepinder Goyal, cofounder and CEO, Zomato, said, “I am delighted to welcome Delivery Hero as a partner and shareholder and look forward to learning from their global experience to help us strengthen our fast growing India food delivery business.”

The online food ordering company Delivery Hero is present across 41 countries in Europe, the Middle East & North Africa (MENA), Latin America and the Asia-Pacific region. Delivery Hero also operates its own delivery service primarily in over 200 cities around the world. In India, Delivery Hero was invested in Foodpanda but later sold it for 1% stake in Ola in 2017.

The reports of such acquisition first began in January when it was speculated that Zomato may sell its business for $200 Mn-$250 Mn as it looks to focus its resources on its fight against homegrown rival Swiggy.

UAE was the first global foray of Zomato in 2012 and soon accounted for 20% of its orders. The company also launched its premium service Zomato Gold in UAE in 2017 and in one year had over 380 restaurant partners for over 15,000 Zomato Gold members.

Zomato has been in a tough situation since its Bengaluru-based rival Swiggy raised $1 Bn in 2018, at the end to the year after joining the unicorn club earlier in the year. To challenge this, Zomato has also been in talks to raise a large funding round of $500 Mn-$1 Bn. Zomato recorded $1Bn in annual gross merchandise value. It also posted a 40% growth in its revenue for FY18 and targeted expansion to 100 cities across India.