Monday, 4 March 2019

Zomato to sell UAE business to Delivery Hero

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

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. 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.
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.

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