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Uber today confirmed it’s buying on-demand delivery company Postmates in an all-stock deal valued at $2.65 billion. The announcement follows a week of intense speculation, with Bloomberg reporting earlier this morning that the deal was done, though neither company had responded to the claims until now.

Uber says it will leverage Postmates to boost its own burgeoning food delivery business, Uber Eats, as well as its broader “delivery-as-a-service” push. Uber said that after the acquisition closes, the consumer-facing Postmates app will be maintained as a standalone entity, though merchants and customers will benefit from a combined delivery network.

Uber is no stranger to strategic acquisitions, having recently paid $3.1 billion for Middle Eastern ride-hailing rival Careem and bought a controlling stake in Latin American grocery delivery startup Cornershop. At the same time, Uber has divested a number of its local businesses to more established rivals in Eastern Europe, China, and Southeast Asia.


Postmates had been a hotly anticipated IPO candidate for 2020 and filed its paperwork confidentially with the Securities and Exchange Commission (SEC) last year. The San Francisco-based company shelved those plans due to a lukewarm response from investors but was reportedly preparing to revive its IPO hopes as early as this week, which may have spurred Uber’s acquisition.

Founded in 2011, Postmates emerged as one of the main players in the on-demand food delivery sphere, offering restaurants and other eateries easy access to a smartphone-based delivery network. Although the platform is perhaps best known for delivering food, it can be used to courier just about any item between a merchant and buyer. This is similar to the way Uber has evolved, reappropriating the logistics infrastructure from its taxi-like transportation services for Uber Eats, which the company announced today has experienced a 100% year-on-year increase in bookings during Q2 2020. A few months back, Uber also unveiled a new service called Uber Connect, which repositions its platform as a courier service that allows people to transport almost any item.

Although Postmates briefly explored international expansion with a Mexico launch back in 2017, the platform is now exclusively available to U.S. consumers, making this acquisition a purely domestic play for Uber. Indeed, Uber has been working to consolidate its position in the U.S. food delivery market for some time, having reportedly mulled a merger with Postmates’ rival DoorDash last year. (Instead, DoorDash confidentially filed for an IPO earlier this year before raising another $400 million and placing a question mark over the timeline of its plans to go public.) Uber also pursued food delivery juggernaut Grubhub, which was eventually snapped up by European rival Just Eat in a $7.3 billion deal a month ago.

After Uber failed to acquire both market leader DoorDash and Grubhub, Postmates was a logical next target. According to consumer data analytics firm Second Measure, Postmates had 8% of the U.S. food delivery market in May, behind Uber Eats (22%), GrubHub (23%), and DoorDash (45%). Based on that data, Uber will now be the clear second-biggest player in the fiercely competitive domestic food delivery market.

Uber said it will issue around 84 million shares of common stock for 100% ownership in Postmates.

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