Uber Technologies in discussions to buy Postmates for about $2.6 billion, according to people familiar with the matter, the latest in a rapid-fire series of moves to consolidate the food-delivery industry.
Should a deal come together, it could be announced next week if not sooner, one of the people said. But there is no guarantee it will.
Postmates, which has held discussions with other possible buyers since at least last year, has been simultaneously planning an initial public offering. Just Monday, people familiar with the matter said the closely held meal-delivery startup was preparing in the coming days to make its IPO filing public, which could presage a trading debut later this summer.
A combination would augment Uber’s food-delivery arm, Uber Eats, which already has an international footprint and the second-largest market share in the U.S. after DoorDash Inc., according to research from Edison Trends.
Postmates, founded in 2011 and based in San Francisco, is the smallest among the major U.S. players. The company has raised roughly $906 million and was valued at around $2.4 billion in 2019, according to PitchBook. It had confidentially filed for an IPO in February of last year, but the plan was delayed when the IPO market became less hospitable to unprofitable startups such as Postmates in the wake of WeWork’s aborted IPO.
There has been a beehive of deal activity lately among food-delivery companies, which are seeking to better position themselves amid cutthroat competition and as the coronavirus pandemic boosts demand. By combining forces and cutting costs, the companies could jump-start their path to profitability, something investors are increasingly eager to see.