Uber Eats will now deliver you booze after buying Drizly for a cool $1.1 billion
Uber is looking to diversify the portfolio of its Uber Eats delivery service by adding booze to the list of products it covers. The ride-hailing giant has announced that it is acquiring Drizly – the top on-demand alcohol marketplace in the US – for around $1.1 billion in stock and cash. Following the acquisition, the eponymous Drizly app will continue to remain functional as usual. However, Drizly’s business will become a wholly-owned subsidiary of Uber and its marketplace will be integrated with that of Uber Eats.
Talking about Drizly shareholders, over 90% of the deal amount will be covered by Uber common stock, while the remaining portion will be paid to them in cash. The deal is expected to close in the first half of 2021 and is now pending regulatory approval. Here’s what Uber CEO Dara Khosrowshahi said regarding the deal:
|“Wherever you want to go and whatever you need to get, our goal at Uber is to make people’s lives a little bit easier. That’s why we’ve been branching into new categories like groceries, prescriptions and, now, alcohol.“|
On paper, this sounds like a win-win strategy for both companies. With Drizly, Uber gets access to a fresh audience, a new product segment under its umbrella, and a chance to widen its portfolio of services. Drizly, on the other hand, will allow its merchant partners to exploit Uber’s huge user base, access to financial and on-road resources, and the company’s impressive routing technology too. Plus, Uber’s own rewards and subscription program benefits will now be available to Drizly partners too.
Back in July last year, Uber acquired meal delivery service Postmates in a deal valued at $2.65 billion after failing to acquire Grubhub. Uber had originally planned to let Postmates operate independently following the acquisition, but allowing it to leverage the ride-hailing company’s network of merchants and delivery resources.
But just over a week ago, Uber laid off over 180 Postmates workers, with founder and CEO Bastian Lehmann also leaving the company at the same time. As for Uber, it went ahead with plans of integrating Postmates’ infrastructure with that of Uber Eats.
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