San Francisco-based Uber, in a bid to secure Uber Eats as a major player in the future of food delivery, is courting another rival for a possible acquisition — and like with the recently failed courtship of Grubhub, they are not Postmates' only suitor.
The New York Times has it via three sources close to the deal that Uber has made an offer to buy Postmates, which is also based in San Francisco, with the offer reportedly somewhere in the neighborhood of $2.6 billion. That's a far smaller deal than the one that Uber ultimately lost to Europe-based Just Eat Takeaway to acquire Grubhub, which was valued at $7.3 million and would have given Uber Eats a far larger share of the US delivery market.
Reportedly, the deal to buy Postmates could possibly be settled very soon. But as CNBC reports, there is again a competing offer, this time from a special purpose acquisition company (SPAC) — a shell company that makes acquisitions in order to help companies like Postmates transition into becoming publicly traded entities. Postmates filed for an IPO in February, just before pandemic lockdowns began, and word is that the company still may want to pursue the path of becoming publicly traded.
While popular in California, particularly around Los Angeles, Postmates has struggled to get a foothold elsewhere in the face of stiff competition from Uber Eats, DoorDash, Grubhub, and Caviar — which itself was acquired by DoorDash last year.
As the Times notes, the delivery app category has been "ripe for consolidation" for some time, and Uber is hoping to make this end run to bolster what CEO Dara Khosrowshahi has already publicly said is the company's great hope for recovery from the pandemic hit taken by its core ride-hailing business. Uber Eats continues to be unprofitable, but all delivery services have seen significant revenue growth since the lockdowns began in March.
Last quarter, reported gross bookings for Uber Eats were $4.68 billion, a figure that TechCrunch calls "staggering." And while a combined Uber Eats and Postmates service would still be smaller in market share than DoorDash, the companies would still likely be more competitive together than apart, which Postmates is likely considering as well.
We'll update you if word comes in that a deal has gone through, or not.
Previously: Uber Reportedly In Talks To Acquire GrubHub
Photo: Spencer Davis