Venture Capital: Food Delivery Start-Up Postmates Sells Out to Uber for $2.65B

July 6, 2020 | News, Venture Capital

The all-stock deal is expected to be announced today according to reports.

Uber Technologies Inc. (NYSE: UBER) is acquiring food delivery start-up Postmates for $ 2.65 billion in an all-stock deal, according to reports by Bloomberg and the New York Times.

Uber and Postmates had discussed a merger on many occasions over the past four years. However, the current feeding frenzy in M&A deal-making in the food delivery sector probably spurred a closure this time around.

It’s all about scale

Uber’s ill-fated plans to acquire GrubHub Inc (NYSE: GRUB) were nixed when European online food and beverages delivery platform Just Eat NV (LON: JET) swept away GrubHub with a $ 7.3 billion bid. Presumably, Uber reopened talks with Postmates after its abortive bid for GrubHub. The startup is a smaller rival to Uber Eats, Uber’s own food delivery service.

Players in the sector are jockeying for scale and after the coronavirus pandemic boosted demand for food and beverage deliveries.

It’s a low margin, highly competitive business and Uber is probably looking to cut administrative overheads and platform costs by consolidating Postmates (market share 8%) with Uber Eats (market share 23%). On the revenue side, the combined service could gain more pricing muscle.

Its food delivery operations could balance the negative impact of the COVID-19 pandemic on Uber’s ride-hailing business.

However, in the rapidly consolidating sector, DoorDash is still the dominant player, delivering about 44% of US meals in May.


Bastian Lehmann, Sam Street, and Sean Plaice co-founded Postmates in 2011. It currently has a fleet of over 500,000 members and 600,000 merchants across 50 American states.

According to the San Francisco Chronicle, the startup previously held deal-making discussions with both DoorDash and GrubHub.

Postmates is currently number four in the food delivery market share sweepstakes. It has a good customer base in Los Angeles as well as the American Southwest.

It is expected that Uber will merge Postmates into Uber Eats, and Uber Eats head Pierre-Dimitri Gore-Coty will continue to be at the helm of affairs of the combined entity. However, Postmates Chief Executive Officer Bastian Lehmann and his team will continue to manage the operations of the Postmates unit.

Related Story:  The Uber Vs. Grubhub Food Delivery War – ETFs to Profit                                 

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Latest Alternative Investment News
Alternative Investments/ESG: The Newday Sustainable Development Equity ETF

Newday offers portfolios addressing the world’s most pressing environmental and social issues including climate action, ocean health, clean water, diversity, equity and inclusion, wildlife conservation and animal welfare, and stakeholder…
Artificial Intelligence: Disperse Raises $16M For AI-Enabled Construction
September 27, 2022     Artificial Intelligence, News, Venture Capital

Disperse, a provider of AI software that streamlines processes and productivity at construction projects, has raised $16 million in a funding round led by 2150 with participation by existing investors…
Digital Assets: Do Kwon Not In Singapore; Interpol Issues Red Notice For The Terra Co-Founder
September 26, 2022     Digital Assets, Latest News, News

According to a Bloomberg report, South Korean authorities have confirmed in a text message Monday that Interpol had issued a Red Notice for Kwon, requesting law enforcement forces globally to…
Venture Capital: ffVC Steps In To Fill Funding Void, Launches Fund For Ukrainian Startups

ff Venture Capital, or ffVC, an early-stage venture firm focused on global opportunities, launched the ff Blue & Yellow Heritage Fund, the first US venture capital fund exclusively for Ukrainian…