Tue 07 July 2020:
Uber said Monday it was buying delivery startup Postmates for $2.65 billion in stock, in a move shaking up the sector which has seen surging growth during the coronavirus pandemic.
The acquisition steps up the effort by Uber to diversify its business to meet growing delivery demands after failing to win a battle for US meal delivery giant GrubHub
Postmates, a startup specializing in delivery of food, groceries and other goods, will be integrated into Uber Eats, which has seen its business double during the global health crisis.
Analyst Daniel Ives of Wedbush Securities said the deal for Postmates, the number four delivery operator in the US, is “both a defensive and offensive acquisition in the food delivery space for Uber at a time with its core ridesharing business seeing massive headwinds in this COVID-19 pandemic.”
Even with a pandemic-induced increase in demand, Uber Eats recorded a $313 million adjusted EBITDA loss in the first quarter. Uber on Monday said Eats bookings have more than doubled in the second quarter, but the company declined to provide additional financial details, including on Postmates.
Khosrowshahi said some 30% of Postmates’ orders come from subscribers, a reliable customer segment Uber aims to expand with its own subscription service.
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