Zomato has acquired Uber’s food delivery business — Uber Eats — in India for around $350 million (about Rs 2,485 crore). The announcement was made by both the parties on January 21, confirming that Uber will get a 9.9 per cent stake in Zomato as part of the deal. Uber Eats will continue to operate in Bangladesh and Sri Lanka. This gives Zomato a major lead over its competition Swiggy, which is also growing fast in India.

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BSE, Info Edge (India) — a shareholder in Zomato —  said its shareholding in Zomato will stand reduced to about 22.71 per cent on fully converted and diluted basis upon closing of the transaction. Uber Eats will direct its restaurants, delivery partners, and users to the Zomato platform, effective today.

"We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category," said Zomato founder and CEO Deepinder Goyal in a statement.

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Zomato said that the food delivery category is still very small compared to the overall food service market in India. It believes that the deal will help the segment to grow and get built over the next couple of decades.

"Our Uber Eats team in India has achieved an incredible amount over the last two years, and I couldn’t be prouder of their ingenuity and dedication. India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success," Dara Khosrowshahi, CEO of Uber, said.

While Zomato has more than 1.5 million restaurants across 24 countries, Uber Eats has about 26,000 restaurants listed on its platform from 41 cities.