Uber announced today that it is acquiring online alcohol marketplace and delivery service Drizly for roughly $1.1 billion in stock and cash. Prior to the acquisition, Drizly had raised $119.6 million in funding.
According to the press announcement, Drizly operates in more than 1,400 cities across most of the U.S. The company works with thousands of local booze sellers to facilitate orders and delivery of beer, wine and spirits.
Uber said that more than 90 percent of the price paid to Drizly stockholders will be in stock, with the remaining balance paid in cash. Once the acquisition is complete, Drizly will become a wholly owned subsidiary of Uber. Drizly’s marketplace will eventually get integrated into the Uber Eats app and also keep its own titular app.
The move further strengthens Uber’s biggest moneymaker right now — delivery. The pandemic, of course, crushed Uber’s ridesharing business as various states of lockdown/quarantine/movement restrictions negated the ability of people to go anywhere.
But all this quarantining has been a boon for Uber’s food delivery business. In its 2020 Q3 earnings report, Uber said that adjusted net revenue for delivery grew 190 percent year-over-year, hitting $1.14 billion in revenue. As such, the company has spent the past year bolstering delivery, acquiring rival delivery service Postmates for $2.65 billion last summer, and expanding beyond just restaurant food and into grocery delivery.
In addition to eating at home more often, the pandemic, for good or bad, pushed a lot more people into drinking. As of September 2020, Nielesn reported that total sales of alcohol outside bars and restaurants were up 24 percent during the pandemic. At that same time, Drizly told NPR that its sales were up 350 percent year over year.
With the Drizly acquisition, Uber stands to gain in the short term from the continued closure or limited capacity of bars and restaurants across many states. Beyond the immediate closures, since we’ve been dealing with COVID life for practically a year now, new habits have formed including getting alcohol delivered to your door. So getting a bottle of vodka brought to you at home pretty close to on-demand isn’t that strange an idea any longer.
And even though the rates of COVID infections are currently going down in the U.S. and vaccines are being deployed, who knows what going to bars will be like when things return to normal. Will people be skittish to be shoulder to shoulder with hundreds of people yelling for prolonged periods of time? After being cooped up for so long, there’s certainly a pent up desire to do so. But there will also be a desire for smaller, more controllable gatherings at our homes. Gatherings that will definitely need some booze.