Uber has officially sold its food delivery arm to Zomato, a local rival in India. As part of the deal, the ride-hailing company will acquire a 9.99 percent stake in Zomato’s food delivery business.

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The deal was an all-stock deal valued to be between $160 million and $200 million. Through the agreement, Zomato will acquire the whole of UberEats business, including the restaurant partners, workers, customers and even driver-partners that were onboard.

“Through this deal, Uber Eats India users now become Zomato users. I want to assure Uber Eats India users that their Similarly, the delivery partners who were earlier associated with Uber Eats India will be on-boarded on our fleet user experience won’t be compromised in any way – if at all, the scale gives us higher density to make our deliveries faster,” said Zomato’s co-founder and CEO, Deepinder Goyal.

Uber set foot in India’s food delivery business in 2017 and the company reportedly launched plans to sell it as soon as in 2018, according to TechCrunch.

Uber’s food delivery business blew a lot of cash in 2019, and the company’s new move is in line to be profitable by 2021. Part of the company’s plan to achieve this goal has been through offloading hundreds of its workers.

The revenue generated in India reportedly accounted for about 3 percent of the company’s global food delivery business while contributing to 25 percent of the total losses in 2019.

Moving forward, Uber will now concentrate on its core ride-hailing business in the country.

“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,” said Dara Khosrowshahi, chief executive of Uber, in a statement.

Reports suggest that Uber’s ride-hailing business is not number one in the South Asian country. A local rival – Ola – reportedly processes twice as many rides and has a presence in over 100 cities.

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