Talabat Image Credit: Facebook/Talabat

Dubai

Zomato has sold its UAE food delivery business to Talabat, a wholly-owned subsidiary of German firm Delivery Hero Group, for an undisclosed amount.

According to Delivery Hero, the transaction will be fully funded by an acquisition facility.

The company has also agreed to invest $50 million (Dh183 million) into Zomato’s global business, becoming a top 10 shareholder, while also entering into a material operational partnership agreement.

The Economic Times has reporting that Zomato’s UAE business was bought by Delivery Hero for $172 million, but the Indian newspaper didn’t cite a source for the figure.

The statement from Delivery Hero also indicates that Zomato’s UAE business was grossing approximately $24 million in annual revenues, while receiving 14.4 million orders a year.

“The acquisition will add c. [approximately] 1.2 million monthly orders and c. $2 million monthly revenue to Delivery Hero’s MENA business,” adding that the move would “strengthen its leadership position in the UAE.”

In the past year, Zomato has raised close to $500 million, and the company says it plans to continue raising funds, as it battles local rival Swiggy for dominance in India.

“Zomato has built a successful food delivery business in the UAE and India on the back of its restaurant search and discovery app and website,” Niklas Östberg, CEO of Delivery Hero, said in a statement. “The acquisition will allow us to further improve our service to customers in the UAE. We are also excited to become a shareholder in Zomato’s rapid food delivery growth story in India and share our learning.”

Deepinder Goyal, CEO of Zomato, said: “I am delighted to welcome Delivery Hero as a partner and shareholder and look forward to learning from their global experience to help us strengthen our fast growing India food delivery business.”

The UAE’s food delivery market is increasingly crowded, with major players, including Deliveroo, Uber Eats, and Talabat all vying for a share of the growing market.

More recently, ride-hailing firm Careem acquired Round Menu, which is present in 18 cities across nine Arab countries.

A 2017 report from KPMG stated that over 60 per cent of consumers polled said they used a food app on their smartphone.