Uber to Purchase Drizly Inc. for $1.1 Billion

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Uber Technologies Inc., the giant global ride-hailing company has agreed to purchase alcohol delivery startup Drizly for $1.1 billion in stock and cash. Subsequently, Uber shares have reported a hike of 7%. The company had informed through a statement that the acquisition of Drizly consists of Uber stock, with less than 10 percent in cash. Drizly’s cannabis delivery arm has been excluded from the purchase. Uber acquire Drizly by beating two of its rival companies that held a talk with the Startup. This is Uber’s biggest deal since 2020 July, the last time when it bought the food delivery app, Postmates. Drizly has previously held discussions with DoorDash Inc., the largest food delivery app in the U.S., and the SoftBank-backed delivery company, GoPuff but both failed to reach an agreement. Drizly’s alcohol will be available both on the Uber Eats app, in line with meals and groceries, as well as on a separate Drizly app. Drizly purchase helps Uber to offer an extended product range to the customer’s doorsteps and represents a wager that the demand will subsist even after the pandemic period. This will also boost online alcohol sales. Drizly has experienced tremendous growth during the Covid-19 pandemic period as customers during the lockdown period largely depend on home delivery instead of venturing to stores.  During the lockdown period in May, this Boston-based company has recorded an astronomical growth in sales which accounted for 400% above the historical levels. An increase in the frequency and number of orders attributes towards the increment in sales. The Covid-19 pandemic has converted Uber from merely a transporting company to one of the most trusted companies for delivering food from restaurants. Since it has shifted its resources to delivery services, Uber’s sales have increased by 125% in the third quarter. This San Francisco-based company has followed deep cuts in spending, including headcount reductions and asset values. They developed self-driving car technology} as well as explored flying taxes. Uber has also sold off its units that rented electric cars. . The deal is expected to be completed by the first half of the year.

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