Uber Technologies Inc is to buy on-demand alcohol e-commerce platform Drizly for approximately $1.1 billion in a largely stock-based deal as the company looks to expand delivery services that have flourished during the pandemic.
Uber said that the Drizly acquisition will allow the company to offer beer, wine and spirits in the majority of US states in addition to groceries, package and prescription delivery that it recently launched in some US cities.
The COVID-19 pandemic induced lockdown measures across the world dealt a blow to Uber's ride-hailing services, pushing the company to branch out into new categories of delivery services.
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Revenue from Uber's food delivery business Eats surpassed rides revenue for the first time in the second quarter of 2020.
Uber declined to give details on what demand it projects for alcohol sales, but said that Drizly has grown gross bookings profitably 300% on a yearly basis.
Drizly, which says that it works with retail partners in more than 1,400 North American cities, will become a wholly-owned subsidiary of Uber. It will be integrated into the Eats platform, while also maintaining its separate app.
In May of 2020, Drizly launched Lantern, which is a cannabis delivery service that currently operates in Boston and Detroit, its website said. Uber told Reuters that Lantern is not part of the Drizly deal.
Majority Of Deal Expected To Be Made Through Uber Stock
Uber expects that more than 90% of the deal will be made through Uber stock and the balance paid in cash to Drizly stockholders.