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Uber buys Postmates for $ 2.65 billion

SAN FRANCISCO – Uber has agreed to purchase the postmates start-up for the delivery of food for $ 2.65 billion, two people with knowledge of the business said, as the hail fighting company has its presence in on-demand delivery wants to expand food while its core business has problems.

Companies are planning to announce the all-stock deal on Monday, the two people said, speaking anonymously because the talks were confidential.

Uber Postmates is expected to partner with its own food delivery subsidiary, Uber Eats, which has grown during the coronavirus pandemic. Pierre-Dimitri Gore-Coty, Uber̵

7;s head of food delivery, will head the services after the contract is signed, people added.

A Uber spokesman declined to comment on Sunday evening, and a Postmates spokeswoman did not immediately respond to a request for comment. Bloomberg previously reported on the details of the deal.

Food delivery apps that connect drivers, restaurants, and customers have grown rapidly in recent years, fueled by venture capital and armies of contract workers. However, the services offered are not very different, which leads to strong competition and the pressure to keep fees low. While more people took delivery services during the pandemic, profits were difficult to grasp.

As a result, delivery app companies have been circling each other to do business to grow in size. Postmates previously discussed possible deals with DoorDash, the largest service in the United States, and another rival, GrubHub, according to two people who knew the conversations.

In the past few months, Uber has also talked about buying GrubHub. But last month, instead, GrubHub was sold to Just Eat Takeaway, a European delivery company, for $ 7.3 billion.

According to Edison Trends, who tracks credit card spending, Postmates and Uber Eats together account for 37 percent of U.S. grocery sales. DoorDash would remain the largest player at 45 percent, while GrubHub would have 17 percent.

Uber is looking for growth as more people stay at home during the pandemic and its core business struggles with hail fights. In May, Uber recorded a loss of $ 2.9 billion in the first three months of the year and announced it would lay off 14 percent of its workforce. However, sales in the Uber Eats division rose by 53 percent.

Postmates, which investors recently valued at $ 2.4 billion, are smaller than the other players. Founded in 2011, the company was one of the first startups to use part-time gig workers to deliver everything they wanted to customers at the push of a button.

Postmates has raised more than $ 900 million from investors like Spark Capital and Tiger Global Management, according to PitchBook. It had submitted to go public.

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