Uber Eats will buy PostMates, for $2.65 billion in stock, the company announced on Monday. The deal is expected to close in the first quarter of 2021. Uber is hoping that this deal will help them expand into other delivery services, like groceries.
‘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,” Uber CEO Dara Khosrowshahi said in a statement.
Gross bookings revenue for Uber Eats rose by more than 50% in the first quarter of 2020. Unfortunately, rideshare business fell by 80% at the height of the Covid outbreak in April, forcing the company to cut 3,000 positions. Rideshare makes up roughly three quarters of Uber’s business.
Uber previously tried to acquire GrubHub in June. The two companies could not agree on the terms, and Grubhub was ultimately acquired by a Dutch food delivery service, Just Eat Takeaway. According to a Financial Times report, Uber and Doordash explored a potential merger last year. Needless to say, that deal did not come to fruition either.
Postmates is smaller than its competitors. The company had a foothold in Miami and Los Angeles, but reportedly struggled against Doordash, Grub Hub, and Uber Eats in other parts of the country. Postmates filed for an IPO at the beginning of 2019, but later delayed the offering.