07.06.20 - Less than a month ago Uber attempted and failed to buy Grubhub, but now the ride-hailing company has managed to close a different deal to revamp its food delivery business. Uber announced recently that it has agreed to buy Postmates for $2.65 billion. Uber described the startup as "highly complementary" to Uber Eats, Uber’s meal delivery service.
Uber CEO, Dara Khosrowshahi, released a statement recently saying, "Uber and Postmates have long shared a belief that platforms like ours can power much more than just food delivery — they can be a hugely important part of local commerce and communities, all the more important during crises like Covid-19."
The deal is yet to be approved by regulatory bodies but is expected to close in the first quarter of 2021. Uber said in its statement that it is "committed to provide bridge financing to Postmates" as it waits for approvals by these regulators. Shares of Uber shot up 5% in early trading following the news.
Postmates is highly considered as one of the trailblazers in the on-demand delivery industry, but despite its good reputation, it is one of the smaller competitors in the US market. In May, the startup reportedly earned only 8% of meal delivery sales in the US. DoorDash reigns as the US leader in terms of sales, with a 44% share.
Source: Wall Street Journal
