-22.5 C
Moscow
Sunday, January 17, 2021

Uber confirms it is acquiring Postmates in an all-stock, $2.65B deal – TechCrunch

Must read

American Airlines Boeing 787-9: A Full Cabin Tour

Simple Flying got a chance to tour an American Airlines Boeing 787-9 in Dallas/Fort Worth International Airport (DFW). Traditionally, the planes are used on...

Virgin Orbit reaches orbit for the first time – TechCrunch

Virgin Orbit launched its LauncherOne rocket to orbit for the first time today, with a successful demonstration mission that carried a handful of satellites...

American Is The First US Carrier To Use Digital Health Passport

American Airlines announced this week that it is introducing a health passport for inbound travel to the United States from all international destinations. Passengers...

Cool: Business Class US-Jamaica Returns Around $450 In June

For those of you seeking an early-summer Caribbean getaway, you may be in luck! On select dates in June, US legacy carrier American Airlines...

Competition continues to heat up in the food delivery wars. In the latest development, Uber today announced that it has acquired Postmates in a $2.65 billion, all-stock deal. It plans to merge the business with its own food delivery business, Uber Eats.

The deal confirms reports that emerged last week, and got re-reported last night with more financial detail, that Postmates and Uber were in negotiations. That deal itself sprung up in the wake of Uber failing to acquire another competitor, Grubhub, which was instead acquired by Europe’s takeout behemoth Just Eat Takeaway for $7.3 billion.

“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,” said Uber CEO Dara Khosrowshahi in a statement.

“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 in his statement.

The all-stock deal valuation that Uber is paying out is a slight bump on Postmates’ last valuation of $2.4 billion, which it reached in September 2019 on the back of a private equity round. But with the ‘money’ all in paper, it puts a lot of pressure both on Postmates and Uber to continue to deliver on growth — pun intended.

For Uber, Uber Eats has been one good news story amid what has otherwise been a very tough life as a publicly listed company. That predicament has taken on a more critical edge in recent months through the COVID-19 pandemic.

In its last quarterly earnings results, the Uber Eats business grew 52% and managed to somewhat offset a big decline in its ride-hailing revenues. In both cases, you can draw a line from the results to social distancing requirements that people have been following around the world: consumers have been staying home more and ordering take-out food to be delivered to them; and at the same time they have been staying away from shared, small spaces, such the ones that you might encounter in an Uber ride. However, with the boost at Uber Eats, the company lost $3 billion last quarter.

The trend of those numbers is one reason why Uber has been looking to expand its food delivery business. The other is the one that has been motivating the larger consolidation trend in food delivery, and that is the principle of economies of scale and how that plays out in terms of operational expenditures, with single drivers able to cover more restaurants and orders, and also the costs of operating the business.

The wider business model requires a lot of subsidising to grow, so taking out a competitor somewhat reduces that kind of costly competitive pressure. It doesn’t eradicate it completely, though: DoorDash, Grubhub (now supercharged with Just Eat Takeaway profits and financial muscle) are still around and will represent strong alternatives both for consumers and restaurants looking for delivery partners.

The public markets is a tough place to play out a growth story for a company that is still profoundly in the red like Uber. In that regard, it’s an ironic place for Postmates to land.

The latter had also been eyeing up a public listing, going so far as to confidentially file for an IPO in February 2019. “Choppy” market forces got the better of it, however, and it put off the plans. Although there were rumors even as recently as last week that the company was still considering this option, in retrospect, that was quite possibly a report planted and spun by those hoping to hedge a better deal out of Uber.

 



Source link

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest article

American Airlines Boeing 787-9: A Full Cabin Tour

Simple Flying got a chance to tour an American Airlines Boeing 787-9 in Dallas/Fort Worth International Airport (DFW). Traditionally, the planes are used on...

Virgin Orbit reaches orbit for the first time – TechCrunch

Virgin Orbit launched its LauncherOne rocket to orbit for the first time today, with a successful demonstration mission that carried a handful of satellites...

American Is The First US Carrier To Use Digital Health Passport

American Airlines announced this week that it is introducing a health passport for inbound travel to the United States from all international destinations. Passengers...

Cool: Business Class US-Jamaica Returns Around $450 In June

For those of you seeking an early-summer Caribbean getaway, you may be in luck! On select dates in June, US legacy carrier American Airlines...

GitHub’s head of HR resigns in light of termination of Jewish employee – TechCrunch

A GitHub internal investigation has revealed the company made “significant errors of judgment and procedure” in the firing of the Jewish employee who cautioned...
Translate »