Uber to buy Drizly, a startup that delivers alcohol, for $1.1B

Uber Technologies Inc. agreed to acquire Drizly Inc., which makes an ondemand alcohol delivery app, for $1.1 billion (U.S.), beating out at least two rival companies that held talks with the startup.

The deal is Uber’s biggest since July when it bought Postmates, a food delivery app. The Drizly purchase primarily consists of Uber stock, with less than 10 per cent in cash, the companies said in a statement Tuesday. The acquisition excludes Drizly’s cannabis delivery arm, an Uber spokesperson said.

Before cinching the deal, Drizly held sale talks with DoorDash Inc., the largest food delivery app in the U.S., and GoPuff, the Softbank-backed delivery company that recently acquired BevMo!, said people familiar with the discussions. Neither reached an agreement, said the people, who asked not to be identified because the discussions were private. The companies either declined to comment or didn’t respond to requests for comment about the discussions.

Drizly has had a breakout year as consumers stuck at home ordered in alcohol instead of venturing to the store. The Boston-based company operates in more than 1,400 U.S. cities connecting customers with local stores to order beer, wine and liquor. In May, around the height of U.S. lockdowns, sales were about 400 per cent above historical levels, the company said. Consumers both ordered more frequently and bought more per order, it said at the time.

The coronavirus pandemic transformed Uber from a company that primarily transported people into one that mostly delivers food from restaurants.

The Drizly purchase will add an expansive selection of products for Uber and represents a wager that demand for home delivery will persist after the pandemic subsides.