Uber to buy Postmates in $2.65 billion deal — Axios (Jul 6, 2020)
Summary
Uber agreed to buy the food delivery company Postmates for $2.65 billion in an all-stock deal, Axios reported on July 6, 2020 under Kia Kokalitcheva's byline. The article sets the deal in a consolidating sector: GrubHub had agreed to sell to Just Eat Takeaway the month before, and even combined, Uber and Postmates would trail DoorDash, which had about 45% of the U.S. food delivery market according to credit card spending tracking companies. Postmates had raised just over $900 million and was last valued at $2.4 billion post-money. Uber's ride-share business fell by as much as 70% in April while its food delivery arm grew. Both companies opposed a newly effective California law that could force them to reclassify drivers as employees and were backing a November ballot measure to change it.
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“Uber to buy Postmates in $2.65 billion deal — Axios (Jul 6, 2020).”
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Jul 6, 2020 - Economy Uber to buy Postmates in $2.65 billion deal Kia Kokalitcheva Axios Pro Rata Illustration: Sarah Grillo/Axios Uber has agreed to acquire food delivery company Postmates for $2.65 billion in an all-stock deal, the companies announced Monday. Why it matters: This is the latest merger for the food delivery space as the sector undergoes an ongoing market consolidation. After failing to agree on terms with Uber, GrubHub struck a deal to sell to Europe's Just Eat Takeaway last month. Nearly a year ago, DoorDash acquired Caviar from Square. The big picture: The Uber-Postmates tie-up would still put the combined businesses' market share behind DoorDash, which has about 45% of the U.S. food delivery market, according to credit card spending tracking companies. Postmates has raised just over $900 million in total funding, and was last valued at $2.4 billion post-money. This deal also showcases Postmates' prowess in the Los Angeles and Miami markets, where the company has strong market share. Between the lines: It's not surprising to see Postmates get acquired. Though it paused its IPO ambitions last year, the company was recently rumored to resume plans to go public and was also looking to raise new funding, as Axios reported. Uber has also been drastically reshaping its business since the beginning of the coronavirus pandemic. Its ride-share business has significantly suffered, dropping by as much as 70% in April, and it recently offloaded its scooter and bike rental unit. However, its food delivery arm has seen a surge as restaurants turned to delivery to remain afloat. The pandemic has also made ride-hailing and delivery more costly for the companies across these industries as they've had to provide more resources to drivers, including paid sick leave and cleaning supplies. What's next: Both Postmates and Uber have opposed a newly effective California labor law that could force the companies to reclassify their drivers from independent contractors to employees. The companies are backing a state ballot measure to change the law in the coming November elections. Go deeper
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