Postmates Mulling $2.6 Billion Offer from Uber

    Company may also move forward with IPO.

    Uber Eats driver brings food on delivery.
    Uber is turning its attention to consolidation in the delivery business after a tough stretch during the crisis.

    After plans with Grubhub fell through, Uber is reportedly seeking to purchase Postmates for approximately $2.6 billion.

    News of third-party delivery consolidation caught fire in May when it was reported that Uber wanted to acquire Grubhub, but the deal was nixed because of concerns over antitrust law and unfair competition. Grubhub then pivoted and joined forces with European third-party delivery company Just Eat Takeaway for approximately $7.3 billion.

    According to Second Measure, DoorDash occupied 45 percent of the delivery market in May, followed by 23 percent for Grubhub, 22 percent for Uber Eats, and 8 percent for Postmates. Although Postmates is fourth-largest among its competitors nationally, it holds the biggest market share in Los Angeles with 35 percent.

    Uber is turning its attention to consolidation in the delivery business after a tough stretch during the crisis. The company lost $2.9 billion in Q1 due primarily to the COVID-19 pandemic. It’s ride-share business has suffered, resulting in the company laying off thousands of full-time employees.

    Meanwhile Uber Eats is booming. It generated $4.7 billion in bookings in Q1, up 54 percent year-over-year. In April, bookings grew 89 percent compared to the prior year, excluding India.

    However, the acquisition isn’t the only offer for Postmates. According to CNBC, the company is deciding between a merger with Uber or joining a special purpose acquisition company to go public. Postmates confidentially filed for an IPO in early 2019, but the plans were put on hold because of unsafe marketing conditions.

    “The reality is that we will IPO when we believe we find the right time for the business and the right time for the markets,” Postmates co-founder and CEO Bastian Lehmann told TechCrunch in October. “And if you look at the markets right now, I believe they are a little choppy. They are a little choppy when it comes to growth companies specifically … We are hopeful that we find a good window to get out there.”

    The company was valued at $2.4 billion during a $225 million fundraising round in September.

    Reuters reported that Grubhub’s merger with Just Eat in addition to recent fundraising has pushed Postmates to move IPO plans forward. The outlet said the company could make its IPO registration public in July.

    With numerous brands shifting to an off-premises only model, third-party delivery providers have had a contentious relationship with restaurant operators amid the pandemic because of fees that sometimes reach 30 percent to 40 percent. Several cities have instituted emergency caps, such as San Francisco, Los Angeles, New York City, Chicago, Seattle, and Washington, D.C.