The San Francisco-based tech giant — best known for its ride-hailing and food delivery services — announced Tuesday plans to acquire Boston-based alcohol e-commerce marketplace Drizly in a cash-and-stock deal valued at $1.1 billion.
In a news release, Uber said it would trade more than $900 million worth of stock for Drizly, the largest alcohol delivery platform in North America.
The transaction is expected to close in the first half of 2021 and is pending regulatory approval.
Once finalized, Drizly will become a wholly owned subsidiary of Uber, and its booze-on-demand services will eventually be integrated into the “Uber Eats” mobile application, according to the release.
“Wherever you want to go and whatever you need to get, our goal at Uber is to make people’s lives a little bit easier,” Uber CEO Dara Khosrowshahi said via the release. “That’s why we’ve been branching into new categories like groceries, prescriptions and, now, alcohol.”
MORE FOR YOU
Drizly shareholders — which include Tiger Global Management, Polaris Partners, Avenir Growth Capital, and First Beverage Group, among others — are expected to receive about 90% of the payment in Uber stock. The remaining 10% will be paid in cash.
Uber’s stock price rose more than 9% following the announcement.
Founded in 2012 by Cory Rellas, Justin Robinson, Nicholas Rellas and Spencer Frazier, Drizly has pulled in roughly $120 million in investment across multiple fundraising rounds, according to Crunchbase.
The company has over 200 employees and it partners with retailers in more than 1,400 cities where legal drinking age consumers are able to order beer, wine and spirits directly to their doorsteps.
“Drizly has spent the last 8 years building the infrastructure, technology, and partnerships to bring the consumer a shopping experience they deserve,” said Cory Rellas, who has served as Drizly’s CEO since 2018.
“It’s a proud day for the Drizly team as we recognize what we’ve accomplished to date but also with the humility that much remains to be done to fulfill our vision,” he added.
The Drizly purchase highlights Uber’s growing interest in the delivery sector at a time when its on-demand transportation business has been battered by the ongoing coronavirus pandemic.
Meanwhile, Drizly sales boomed in 2020, growing more than 330% as many consumers stopped dining out and redirected their dollars toward takeout and delivery.
“By bringing Drizly into the Uber family, we can accelerate that trajectory by exposing Drizly to the Uber audience and expanding its geographic presence into our global footprint in the years ahead,” said Khosrowshahi, who called Drizly “an incredible success story.”
Speaking to CNBC, Khosrowshahi called the deal a “win-win,” noting that Uber users will soon be able to access alcohol delivery services while Drizly will be to reach millions of Uber users “immediately overnight in a very, very big way.”
Even though awareness of the Drizly app has grown during the coronavirus pandemic, Rellas told CNBC that he believes the alcohol delivery business is still “nascent.”
Uber’s plan to purchase Drizly comes just two months after the company completed its $2.65 billion acquisition of restaurant, retail and grocery delivery company Postmates.
Last summer, Drizly launched an on-demand cannabis home delivery platform called Lantern that operates in California, Massachusetts and Michigan. That business is not included in the deal, according to The New York Times
A Drizly executive did not immediately respond to requests for comment.