Uber plans to sell its 7.8% holding in Indian food delivery firm Zomato as early as Wednesday, a source familiar with the matter told TechCrunch.
The ride-hailing giant, which acquired stake in the Indian firm when it sold its local Uber Eats business to Zomato in early 2021, plans to sell its stake through a block deal of over $350 million, for which it is working with Bank of America Securities, the source said, requesting anonymity as the details are private.
The U.S. firm, which reported a net loss of $2.6 billion for the second quarter, said Tuesday that it assumed an unrealized loss of $707 million on its Zomato investment in the first half of this year and the quarter that ended in June 30, 2022.
Uber sold its food delivery business in India to the local rival Zomato for $206 million, following years of aggressively attempts to compete with local food giants Zomato and Swiggy. As part of the deal, Uber acquired a 9.99% stake in the loss-making Indian food delivery startup. Uber didn’t immediately respond to a request for comment.
Shares of Zomato have been performing poorly throughout this year and tumbled to an all-time low last week after the end of the lock-in period of investors who had stakes in the company prior to the initial public offering.
The stock closed at 55.55 Indian rupees (72 cents) apiece Tuesday, giving the company a market cap of $5.5 billion, far below the $13.2 billion valuation it accrued on its debut day a year ago. Zomato said on Tuesday that it aims to reach EBIDTA breakeven by the Q4 of next year and it had downgraded its investment in quick commerce Blinkit from $400 million to $320 million.