Postmates is deciding between going public and selling to Uber or special purpose acquisition company

Key Points
  • U.S. food delivery company Postmates has received acquisition offers from Uber and a special purpose acquisition company, according to sources.
  • Uber turned its attention to acquiring Postmates after its deal to buy Grubhub fell apart about two weeks ago.
  • Postmates had been planning on an initial public offering and could still choose to pursue that path, one of the people said.
Close-up of Postmates logo.
Smith Collection/Gado | Archive Photos | Getty Images

U.S. food delivery service Postmates has received acquisition offers from Uber and a special purpose acquisition company as it simultaneously makes plans to go public, according to people familiar with the matter.

Postmates hasn't decided which path to take, though it's expected to make a decision in coming days, said the people, who asked not to be named because the discussions are private. Uber's offer is valued at about $2.6 billion, according to The Wall Street Journal. Postmates is working with JPMorgan Chase as a financial adviser, the people said. Spokespeople for Postmates, Uber and JPMorgan declined to comment.

The name of the special purpose acquisition company couldn't be immediately identified. A SPAC is a shell company with no operations that acquires private companies for the purpose of transitioning them to publicly traded entities. 

Uber previously was in the running to buy rival food delivery service GrubHub, but talks broke down over price and the ride-sharing company grew frustrated with what it perceived as stalling tactics, as CNBC previously reported. GrubHub instead sold to European food delivery service JustEatTakeaway in early June.

Uber then quickly put together an offer for Postmates, one of the people said. Postmates has considered selling for several years, another person said. 

Regulatory uncertainty

One of the sticking points that doomed Uber's deal for GrubHub was how to address potential regulatory issues from a tie-up. While Postmates is smaller than GrubHub, there are only four major players in the U.S. food delivery market — DoorDash, Uber Eats, GrubHub and Postmates — and any consolidation could raise antitrust concerns.

Uber is banking on food delivery to help sustain its business during the coronavirus pandemic, as demand for ride-sharing has plunged. In its Q1 earnings call, Uber said that gross bookings revenue for its rides segment was down 80% in April from a year earlier, while gross bookings revenue in Eats was up more than 50% during the period. The New York Times first reported Uber's bid for Postmates.

Postmates is the fourth largest U.S. food delivery service by market share and has struggled to compete nationally against DoorDash, GrubHub and Uber Eats. Still, the company has had success in specific urban areas such as Los Angeles and Miami. Postmates had reportedly filed confidentially for an IPO in February 2019, but delayed its offering later that year amid deteriorating market conditions and tough competition, according to Recode.

However, a Reuters report on Monday said the recent string of deals in the food delivery service had persuaded it to begin moving forward with plans for a listing as early as next month. The San Francisco-based company was valued at $2.4 billion in its last fundraising round in September, Reuters said.

Postmates CEO: The food delivery space is not a winner-take-all market
Postmates CEO: The food delivery space is not a winner-take-all market