Dara Khosrowshahi, chief executive officer of Uber Technologies Inc., listens during a panel discussion at the Bloomberg Global Business Forum in New York, U.S., on Wednesday, Sept. 26, 2018.
Mark Kauzlarich | Bloomberg | Getty Images
Uber has bought food-delivery service Postmates, the two companies announced.
Uber previously was in the running to buy rival food delivery service GrubHub, but talks broke down as the two companies could not agree on a price and the ride-sharing company grew frustrated with what it perceived as stalling tactics, as CNBC previously reported. GrubHub instead sold to European food delivery service JustEatTakeaway in early June.
Uber is banking on food delivery to help sustain its business during the coronavirus pandemic, as demand for ride-sharing has plunged. In its first-quarter earnings call, Uber said that gross bookings revenue for its Rides segment was down 80% in April from a year ago, while gross bookings revenue in Eats was up more than 50% during that same period.
Postmates is the fourth-largest U.S. food delivery service by market share and has struggled to compete nationally against DoorDash, GrubHub and Uber Eats. Still, the company has had success in specific urban areas such as Los Angeles and Miami.
Postmates had reportedly filed confidentially for an IPO in February 2019, but delayed its offering later that year amid deteriorating market conditions and tough competition, according to Recode.
Postmates had also been considering re-starting the IPO process, as well as an offer from a special purpose acquisition company (SPAC) — essentially a shell company that exists solely to take another company public, CNBC previously reported. The San Francisco-based company was valued at $2.4 billion in its last fundraising round in September, Reuters said.
This is breaking news. Please check back for updates.
—CNBC’s Alex Sherman contributed to this report.