Uber’s ride with Zomato has concluded. The ride-hailing firm sold its 7.8% stake of the lossmaking Indian food delivery firm on Wednesday for over $390 million, a person familiar with the matter said, becoming the latest large institutional investor to offload its shares.
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 aggressive 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 did not 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.
It fell as high as 9% Wednesday morning until recovering to 52.60 Indian rupees (67 cents) apiece Tuesday, giving the company a market cap of $5.25 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 break-even by the Q4 of next year and it had downgraded its investment in quick commerce Blinkit from $400 million to $320 million.