In an all-stock deal, online food delivery and restaurant discovery site Zomato has acquired Uber Eats’ Indian operations that will give Uber a 9.9% share in the Gurgaon-based company’s shareholding. Effective from 7am Tuesday morning, 21 Jan 2020, Ubereats direct users to the Zomato platform.
The procurement of Ubereats Indian operations comes in the wake of Zomato’s recent fundraising spurred by existing investment company Ant Financial, an affiliate of Alibaba who pumped $150 million at a $3 billion valuation. There were talks of Uber participating in the funding program with principal capital of around $100-200 million.
Uber went public in 2017 when Swiggy and Zomato had already reeled in exclusive deals with some of the major restaurants and chains. The platform was given the deadline to make it to the top two platforms in the food delivery retail business.
However, due to underperformance, it failed to meet the company deadline. With a heavy cash burn of millions per month in India, the business turned out to be among the low priority ones for the parent company. Uber Eats was on the competition for about a year and relied heavily on discounting to acquire and retain users.
Last February, Uber had come close to selling their Indian operations to Swiggy but the deal was dropped for reasons unknown. However as the corporate world says, certain battles are won with retreating.
Ubereats is the clear winner in this buyout process. It has actually profited them and helped them with an annualized savings of over $750 million per year as they get close to 10% stake in the massive buyout. The deal would make sense for Zomato only if market consolidation helps reduce cash burns.
Several acquisitions have taken place earlier in the corporate field. In this article, we bring to you some of the biggest acquisitions from the corporate world.
Food panda- Ola
Ola acquired Foodpanda India from Delivery Hero, to invest $200 million in its Indian operations. Under this deal, Foodpanda’s India operations will be transferred to Ola in exchange for the Ola’s stock. The acquisition marked Ola’s entry into the online food ordering and delivery market, a sector dominated by the likes of Zomato and Swiggy in India, and one in which Ola’s greatest competitor, Uber Technologies Inc. had made headway through its UberEATS venture.
Ola as well trailed what it called Ola Cafe in 2014, but soon after had to shut down the unit. Ola’s alliance with Foodpanda India has unleashed the power of a partnership that will help Foodpanda India evolve as the country’s most preferred online food delivery service. The partnership with Ola was believed to further consolidate markets where it strategically makes sense to collaborate with leading local players. Delivery Hero considers their stake in Ola as a very valuable asset.
Whatsapp – Facebook
Facebook acquired messaging service Whatsapp for $19 billion in February 2014. This acquisition rate for an app, that helped make less profit and was massively popular outside of the United States, was astounding. Facebook had been obsessively monitoring the growth of Whatsapp company for months using Onavo, a VPN and data analytics app, whose data showed that the messaging app was not just a growing competitor; but also a potential killer.
Onavo data from April 2013 revealed that Whatsapp outpaced Facebook Messenger significantly on the web in some places and sent 8.2 billion messages a day compared to that of 3.5 billion Facebook Messengers (on phone). Onavo’s user engagement metrics also noticed Whatsapp exceeding Facebook Messenger in engagement time.
The company took off one of the best ways for analyzing mobile patterns outside of Facebook’s ecosystem after purchasing Onavo and transforming it into a private resource. If there were a potential Facebook killer on the rise, Facebook would feasibly see it before anybody else. Moreover, few months later, in February of 2014, Facebook acquired Whatsapp.
Shazam-Apple
Apple acquired Shazam for a whopping amount of $400 million on 24 September 2018 and is one of the rarest and largest purchases that Apple has made that involved revolutionary changes to its platform. Shazam used by hundreds of millions of people worldwide, is one of the world’s most popular and highly rated music apps. In fact, Apple and Shazam have been associated with each other for a long time.
Shazam was one of the first few apps available when app store was first launched. Shazam lets you identify songs just by listening to a short bit of the music playing around the device. After acquisition, Shazam has been made ad free to users so that users can keep enjoying the app without any interruption. There have been over 1 billion downloads for the Shazam app and is used by millions of users daily.
Musical.ly – TikTok
In November 2017, Musical.ly users opened their apps to a surprise as they found their app logo to be replaced as TikTok. The lip-syncing app Musical.ly popular with teens and young peoples was sold to Chinese social media giant Toutiao for somewhere between $800 million and $1 billion. The acquisition of Musical.ly is the largest overseas investment for Chinese startup Beijing ByteDance Technology. The core feature of both the apps remains the same: 15sec duration short videos.
The teen karaoke app had a huge milestone of about 100 million monthly users. The acquisition of Musical.ly was a strategically plan of ByteDance to break into the US market. Moreover, in the first quarter of 2018, TikTok was the worlds most downloaded app. TikTok operates as Douyin in china with over a 300 million monthly active users. However, Tiktok misses the essential purpose of the Musical.ly app, which is teen lip-syncing, and dancing to music.
So, these are some of the famous and expensive app acquisitions of our time. Feel free to comment on other app acquisitions that enticed you in our comment box below. Also, contact our team, if you have any app ideas, to let us help you bring your dream to a reality.
