Uber Eats India, which is acquired by Zomato on Tuesday, has seen its valuation grow threefold over what it was valued at last year at the time of Uber transferring its India businesses from the Netherlands entity to the Indian entity.

Zomato completed the acquisition of Uber Eats' India business in an all-stock deal on Tuesday, which will give the global ride-hailing company a 9.99 percent stake in Zomato. Zomato was last valued at $3 billion when it raised $150 million from Ant Financial.

This would put the valuation of the Uber Eats deal at about $300 million.

Launched in 2017, Uber Eats in India was valued at Rs 714 crore, according to a valuation report of Uber's India business by BSR & Associates in September last year, which was done at the time the India ride-sharing business was transferred from Uber's Netherlands entity Uber BV to its India entity Uber India System Pvt Ltd.

The report had valued Uber's ride-sharing business in India at Rs 1,824 crore.

With this acquisition, Uber Eats India will cease operations in the country and its customers will be transferred to Zomato starting Tuesday.

Will Zomato really be the new Number 1?

For Zomato, which was at the second position behind Swiggy in the food-tech market, the acquisition will add muscle to its business, but will also come with its own set of challenges.

Uber Eats India was a far third in the segment with 12 percent market share in the food delivery category, with 26,000 restaurants across 41 cities.

Some analysts say, that with the acquisition, Zomato's market share in the food-tech space may make it the number one player with over 50 percent market share.

However, others believe it will not be a simple linear integration.

"The customer base and the restaurant base were not exclusive, and some Uber Eats customers may migrate to Swiggy as well," said Rohan Agarwal, director, RedSeer.

"But this acquisition will definitely benefit Zomato, especially to close the gap in the top 10 markets where it was lagging," he added.

But what should worry Zomato are Uber Eats’ numbers in India.

Uber Eats India contributed 3 percent of global Uber Eats revenues, but contributed a massive 25 percent of Uber Eats global interest, tax, depreciation and amortisation (EBIDTA) losses, as per sources at Uber privy to the information.

"Uber was looking to offload Uber Eats in India for some time because Dara Khosrowshahi (Uber CEO) wanted the company to move towards profitability," a source at Uber India said.

In the valuation report cited above, Uber India Eats business was forecast to see revenues for FY20 at Rs 79 crore for operating expenses of Rs 1,390 crore. By 2030, Uber India Eats business is expected to make revenues of Rs 12,598 crore for expenses of Rs 5,678 crore.

In fact, Uber had held talks with Swiggy in 2019 for sale of Uber Eats India, but talks fell through due to mismatch in valuations, as per reports.

Will India's Foodtech sector be a duopoly now?

Started around 2015, the food-tech sector has been growing at a strong 150 percent CAGR and is now a $4.6 billion market​, according to research and consultancy firm Redseer. However, over the past few months, the sector has seen rationalisation.

"Both Swiggy and Zomato have cut down on discounts in the last 2-3 months, and with the segment now becoming a duopoly, there could be a further rationalisation," Agarwal observed.

What this could mean is lower discounts for customers, but more value from these players, he added.

However, the threat from Amazon's entry into food tech is looming large, with the e-commerce company already signing up restaurants, as per sources. This could, instead, lead to further aggressive spends by Zomato and Swiggy.

Riyaaz Amlani, CEO & MD – Impresario Handmade Restaurants, and a trustee with the National Restaurants Association of India, said that things may not change too much for restaurants with the acquisition.

"But given that Zomato will be onboarding a balance sheet with losses, there could be a possibility of Zomato increasing commissions for restaurants," Amlani said.

Asked about the possibility of Zomato Gold now being present in more restaurants with the acquisition, he said NRAI continues to be ideologically opposed to such discounting methods, an issue that saw several NRAI member restaurants 'log out' of Zomato last year.

At Uber Eats India, 250 employees are expected to be impacted by this acquisition, and sources said some of them could be absorbed into Uber's other verticals in India.