Food delivery startup Zomato is in advanced stages of talks to buy rival Uber Eats in a deal that will ratchet up its expansion to 550 cities and boost its presence in southern markets.

The deal with Uber Eats, a unit of the American ride-hailing company, is in the last lap and could close by as early as the end of January, said multiple people familiar with the discussions between the two companies.

Zomato did not comment for this article.

A deal with Uber Eats will help Zomato not only in expansion but is also expected to aid in the acquisition of premium customers.

The talks come as Zomato is about to close a fresh round of capital from existing investor Ant Financial, an affiliate of China's Alibaba. That pegs its valuation at $3 billion.

After concluding the acquisition, Zomato will continue to focus on fiscal disciple, by cutting its burn rate and trim losses, said a person familiar with the matter, requesting anonymity.

First Published:Jan 10, 2020 12:32 PM IST