Uber acquires Postmates for €2.34B after losing Grubhub deal to Just Eat Takeaway

The ride-hailing app Uber, which also operates as a food delivery company UberEats will acquire Postmates for $ 2.65 billion (approx €2.34 billion) in an all-stock transaction, after all the struggle to buy out Grubhub tanked previously

Plans to close deal in Q1 2021

This acquisition could boost Uber’s delivery business and help compensate the company’s core ride-hailing business, which has plummeted due to the COVID-19 pandemic. Notably, the San-Francisco-based company reported $ 2.9 billion (approx €2.6 billion) loss in the first quarter of 2020. The company is planning to close the deal in Q1 2021. Post the acquisition, Postmates app will continue to run separately but with a more efficient, combined merchant, and delivery network. 

Uber CEO Dara Khosrowshahi, said, “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. As more people and more restaurants have come to use our services, Q2 bookings on Uber Eats are up more than 100 percent year on year. We’re thrilled to welcome Postmates to the Uber family as we innovate together to deliver better experiences for consumers, delivery people, and merchants across the country.” 

Soaring demand for online food delivery

According to Uber, consumers will benefit from expanded choice across a wider range of restaurants and other merchants. For restaurants and merchants, Postmates and Uber Eats will together offer more tools and technology to more easily and cost-effectively connect with a bigger consumer base.

Even though the company is not profitable, the demand has soared since mid-March, with 89% YoY gross bookings growth in April. On the other hand, Uber Eats is shutting down its business in unprofitable markets. 

60,000 restaurants and retailers, 50 states

Founded by Bastian Lehmann, Sam Street, Sean Plaice in 2011, Postmates led the creation of on-demand delivery in the U.S and has grown to be the number one platform in Los Angeles. 

Right now, the platform operates in all 50 states and offers customers access to the most selection of merchants in the US with more than 600,000 restaurants and retailers available for delivery and pickup, many of which are exclusive to Postmates. 

“Over the past eight years we have been focused on a single mission: enable anyone to have anything delivered to them on-demand. Joining forces with Uber will continue that mission as we continue to build Postmates while creating an even stronger platform that brings this mission to life for our customers. Uber and Postmates have been strong allies working together to advocate and create the best practices across our industry, especially for our couriers. Together we can ensure that as our industry continues to grow, it will do so for the benefit of everyone in the communities we serve,” said Postmates Co-Founder and CEO Bastian Lehmann.

Main image credits: rafapress/Shutterstock

The post Uber acquires Postmates for €2.34B after losing Grubhub deal to Just Eat Takeaway appeared first on Silicon Canals .

Startups – Silicon Canals

Uber reportedly agrees to acquire Postmates for $2.65 billion

Uber has reportedly agreed to buy Postmates in an all-stock deal worth $ 2.65 billion. According to Bloomberg, the deal may be announced on Monday morning.

Like other travel- and transportation-related businesses, Uber’s ride-hailing segment has been negatively impacted by the COVID-19 pandemic, due to shelter-in-place orders throughout the United States. On-demand delivery, however, has grown, with people relying on services like Uber Eats to get food without leaving their homes. According to its last earnings report, Uber’s ride-hailing gross bookings dropped, but its food delivery service saw gross sales growth of 54% during its first fiscal quarter.

According to previous reports, Uber made an offer to buy Grubhub, another on-demand delivery service, earlier this year, but after that deal fell through, it approached Postmates. Bloomberg reports that Uber and Postmates have actually talked on and off for about four years, but negotiations became more intense about a week ago.

Grubhub ended up being acquired by Just Eat Takeway in a deal worth $ 7.3 billion after its negotiations with Uber stalled.

With a valuation of $ 2.4 billion, Postmates is a smaller company than Grubhub. The company filed to go public in February 2019, but decided to hold off because of “choppy market” conditions.

If the deal goes through, the main competitors in the American food delivery market would be Uber Eats/Postmates versus Grubhub/Takeaway versus DoorDash.

In other countries, companies like Grab have also begun building out their on-demand delivery services to make up for losses from fewer ride-hailing bookings. For example, Grab responded to stay-at-home orders in Indonesia (its main market) and other Southeast Asian countries by re-deploying ride-hailing drivers to on-demand deliveries for food and essential items.

Startups – TechCrunch

As Uber hunts for a deal, can Postmates leverage an IPO?

It’s been a busy last 24 hours or so for on-demand delivery company Postmates. According to reporting, the company is reviving its IPO plans, possibly selling to Uber, or perhaps looking to go public with the help of a special purpose acquisition vehicle, also known as a SPAC.

For Postmates, a company caught somewhere between DoorDash’s cash-fueled rise and Uber’s ability to lose hundreds of millions on its Uber Eats delivery service every quarter, multiples options are likely welcome.

Postmates first filed to go public in early 2019, but its IPO failed to materialize. The company was also reported to be pursuing a sale in 2019 after it had filed to go public. An M&A exit also failed to appear.


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But 2020 is very different from 2019. With GrubHub’s bidding war behind us, Uber appears hungry for more volume, and the IPO market is surprisingly hot given the global pandemic. Postmates may have a number of viable options in front of it, instead of a continued grind as a private company.

The IPO market

So what to do?

Despite some blips, if Postmates has managed anything like revenue growth acceleration because people have been staying home and ordering more food and other goods, the company’s IPO story could prove attractive. And if so, the firm could perhaps best what a cash-burning company can afford to part with in an M&A transaction by going public.

Let’s check the tape. It’s a commonly known fact that the public markets have favored technology companies this year, especially software companies. For many venture-backed companies, this is great news. For Postmates, it’s a slightly different equation, as its margins won’t match those of software companies, nor will its revenue recur in a similar fashion.

But, there are IPOs from this year that we can point to featuring companies that also do not feature strong margins or recurring revenue that did great. So, there is an IPO path for venture-backed startups and unicorns to go public even if they are not software entities.

Vroom

Startups – TechCrunch

After losing Grubhub, Uber reportedly hails Postmates

Uber has reportedly made an offer to buy food delivery service Postmates, according to The New York Times.

According to the Times, the talks are still ongoing and the deal could fall through.

For those that have been paying attention to Uber, this appetite is not new, albeit consistent. A little over a month ago, the ride-hailing company was reportedly pursuing an acquisition of Grubhub,  another food delivery company. Grubhub was ultimately acquired by Just Eat Takeaway in a $ 7.3 billion deal, but only after the deal with Uber fell through over a variety of concerns.

Food delivery market has set to benefit largely from the COVID-19 pandemic, as stores remain shuttered or switch operations to takeout only. Latest earnings from the public ride-hailing company show that its ride-hailing business is slowing while its food delivery service is growing like hell. Gross bookings for Uber Eats last quarter were $ 4.68 billion.

So even though Uber still loses a ton of money ($ 2.94 billion including all costs), its Uber Eats growth is staggering. And the green shoots might be fueling some of this interest in other competitors.

Sources close to Uber told TechCrunch that regulatory concerns scuttled the company’s bid for GrubHub, but its chief executive later said the JustEat deal was better.

If regulatory concerns were an issue, Postmates may make a better fit.

With a valuation of $ 2.4 billion, Postmates is significantly smaller than Grubhub. And while the company filed to go public nearly 16 months ago, it held off eventually citing “choppy market” conditions.

So if Uber Eats and Postmates combined, the result would still be smaller than Doordash’s market hold, but would be competitive nonetheless. DoorDash, last valued at $ 13 billion, confidentially filed for an IPO nearly four months ago. 

Also, Postmates delivers more than just food.

If the merger goes through, the food delivery race would get refueled in an interesting way: Uber Eats and Postmates versus Grubhub and Takeaway versus DoorDash .

Postmates declined to comment on rumors or speculation. Uber did not immediately respond to a request for comment.

Startups – TechCrunch

[Phantom Auto in Forbes] For Postmates’ Robot Fleet Supervisors, The Hardest Part About Working From Home Is Slow Internet

The San Francisco-based startup uses technology from Phantom Auto to facilitate operation of its robot fleet. The system displays a live video feed of a Serve robot as it navigates autonomously from a restaurant to a customer, and enables its human supervisor to take over control and operate them remotely if it gets stuck or encounters a situation it can’t overcome on its own.

Read more here.

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