Uber Technologies has agreed to acquire Postmates for $2.65 billion in a stock deal to expand its food delivery market share and significantly increase the business of supplying everyday goods.
The deal would give Uber a roughly 30 percent share of the U.S. food delivery market, trailing only rival DoorDash, which commands some 45 percent, according to analytics firm Second Measure.
Uber Chief Executive Dara Khosrowshahi on Monday told analysts the tie-up would allow Uber Eats to distinguish itself by delivering not only restaurant food, but everything from groceries to personal care and fashion items.
Uber has launched an option to send packages via its U.S. ride-hail drivers during the Covid-19 pandemic and teamed up with grocery stores in several countries. The acquisition allows it to expand into Postmates’ existing network in 4,200 U.S. cities.
Dara Khosrowshahi said he expects the deal to create profitability for the Uber’s Eats unit, as well as some $200 million in cost saving synergies in about two years and additional efficiency gains through Uber’s smarter routing technology.
Uber’s plan to acquire U.S. food delivery rival GrubHub, which commands 23 percent market share, faltered over regulatory and other concerns. GrubHub was snatched up by Takeaway.com NV on June 11.
When Uber presented its offer in June, Postmates was gearing up for an initial public offering for July.
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.
Dara Khosrowshahi said some 30 percent of Postmates’ orders come from subscribers, a reliable customer segment Uber aims to expand with its own subscription service.