Uber is reportedly in talks to offload Uber Eats in India

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.

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The news was first reported by the Times of India newspaper.

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Uber and Zomato declined to comment, with spokespeople for both companies saying they “don’t comment on rumors or speculation.”

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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.

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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.

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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.

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“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.

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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.

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The ride-hailing giant is also no stranger to exiting markets where it’s struggled against local rivals, having offloaded its businesses in Russia, China and Southeast Asia in recent years.

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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.

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