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

Close-up of Postmates logo.

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U.S. food delivery service Postmates has received acquisition offers from Uber and a special purpose acquisition company, or SPAC, 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 the 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. A spokesperson for JPMorgan declined to comment.

The name of the SPAC 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. Representatives for Uber and Postmates couldn’t be reached for comment.

Uber previously was in the running to buy rival food delivery service GrubHub, but talks broke down as the two companies could not agree on a 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 quickly altered its plans after the GrubHub deal died and 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 ago, while gross bookings revenue in Eats was up more than 50% during that same 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 rivals 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 that the recent string of deals in the food delivery service had convinced 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.

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