Uber is changing tack after acquisition talks with Grubhub fell through by switching its attention to food delivery startup Postmates, the New York Times reports.
Three sources familiar with the matter told the Times that Uber and Postmates were holding ongoing acquisition talks. One of the sources said Uber is offering to buy Postmates for roughly $2.6 billion.
Uber was reportedly in acquisition talks with food delivery startup Grubhub earlier this year, but Grubhub announced on June 11 it was instead merging with European takeaway service Just Eat. Sources told CNBC Uber walked away from the deal over concerns it would attract antitrust scrutiny.
As a much smaller player in the food delivery business, Postmates could be a safer option.
According to analytics firm Second Measure, Postmates makes up a significantly smaller chunk of the US market than Grubhub. Grubhub captured 32% of food delivery sales in 2019, while Postmates made up 10%. Uber Eats meanwhile accounted for 20% of the market.
Antitrust fears are not the only possible reason why Uber may have walked away from Grubhub, various reports emerged that the two firms struggled to agree on a price for the acquisition. Just Eat paid roughly $7.3 billion to acquire the startup.
Uber’s desire to bolster its food delivery service has reportedly been spurred on by the coronavirus pandemic, as demand for taxi services has plummeted while food delivery has skyrocketed.
Two sources told the Times Postmates has also held sale talks with Grubhub and DoorDash over the past year.
Postmates confidentially filed plans for an IPO with the SEC in February 2019, but has yet to go public. Sources told Reuters on Monday that the company is considering reviving its IPO plans due to the boom in food delivery brought on by the pandemic.
Uber and Postmates were not immediately available to comment when contacted by Business Insider.
This article was written on BusinessInsider.com by Isobel Asher Hamilton