I don't understand why Uber has been so obsessed with buying another company in the US food delivery market.
Distraction and probably an excuse why they have high liabilities.
I don't see the difference, personally.
Uber, Postmates Agree on $2.65B All-Stock Deal
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Re: Uber, Postmates Agree on $2.65B All-Stock Deal
#12They offered $5B for Grubhub who has 30% market share, and now $2.65B for Postmates who has just 8% market share.
Grubhub is mostly big in NYC. Doordash has the most marketshare at around 45% and good coverage in the US. Postmates and Uber Eats were battling for 3rd place. Postmates seems to have more restaurants on board along with branching out into drinks and convenience stores, and I believe general shopping in certain regions.
Re: Uber, Postmates Agree on $2.65B All-Stock Deal
#13I don't understand why Uber has been so obsessed with buying another company in the US food delivery market.
Increase network, decrease spending to beat out a competitor.
Re: Uber, Postmates Agree on $2.65B All-Stock Deal
#14Postmates raised $903M since 2012: https://www.crunchbase.com/organization/postmates Not a 10x exit.
> Postmates raised $903M since 2012 ... Not a 10x exit.
I suspect that many of the investors are just happy to record a profitable exit.
Re: Uber, Postmates Agree on $2.65B All-Stock Deal
#15Re: Uber, Postmates Agree on $2.65B All-Stock Deal
#16They offered $5B for Grubhub who has 30% market share, and now $2.65B for Postmates who has just 8% market share.
Grubhub is mostly big in NYC. Doordash has the most marketshare at around 45% and good coverage in the US. Postmates and Uber Eats were battling for 3rd place. Postmates seems to have more restaurants on board along with branching out into drinks and convenience stores, and I believe general shopping in certain regions.
GrubHub (and seamless) are popular in most urban cities. Sure NYC was popular when they started but I don’t think it’s solely NYC or even solely US.
Re: Uber, Postmates Agree on $2.65B All-Stock Deal
#17They offered $5B for Grubhub who has 30% market share, and now $2.65B for Postmates who has just 8% market share.
But surprisingly enough, both have similar revenue. And I guess Uber didn't want a bidding war over GrubHub after the very generous Just Eats bid (7.3b$). The difference between Uber's original bid and Just Eat's is almost the entire price they paid for Postmates.
Re: Uber, Postmates Agree on $2.65B All-Stock Deal
#18I am bullish on this as a recent shareholder. We are now in the consolidation phase of delivery service where fewer companies mean less competition, more efficiency and better economics.
This is where Dara’s strength is. He has a history of great dealmaking and acquisitions. I expect Uber to thrive as the industry consolidates.
Re: Uber, Postmates Agree on $2.65B All-Stock Deal
#19I don't understand why Uber has been so obsessed with buying another company in the US food delivery market.
The CEO is a banker. Naturally he sees M&A, not innovation, as the company's future.
Re: Uber, Postmates Agree on $2.65B All-Stock Deal
#20I am bullish on this as a recent shareholder. We are now in the consolidation phase of delivery service where fewer companies mean less competition, more efficiency and better economics. This is where Dara’s strength is. He has a history of great dealmaking and acquisitions. I expect Uber to thrive as the industry consolidates.
A more cynical take on this might be that it's hard to actually turn a sustainable profit in this market unless you have monopolistic pricing power, and hence, consolidation. Less of "the strong get stronger" and more of "the unprofitable become few enough to become profitable"