Uber is looking even more like a delivery company than a ride-hailing business.
Uber announced Tuesday that it will buy Drizly, an alcohol delivery startup, for approximately $1.1 billion in stock and cash. Following the completion of the transaction, Drizly will be integrated with the Uber Eats app, while also maintaining a separate app. The sale is expected to close the first half of 2021.
Uber’s stock is up 6% as of 1pm US eastern time.
Founded in 2012, Drizly is available in 1,400 US cities. The Boston-based company has $119 million in venture capital funding.
There’s a big opportunity in the alcohol delivery market, as states have begun to loosen alcohol delivery laws to help soften the economic blow to restaurants. In 2019, online US liquor sales reached $2.6 billion, and is expected to grow nearly five times to $13.4 billion in 2024.
Uber has been aggressively expanding its delivery offerings during the pandemic. In August, the ride-hailing giant announced its expansion to prescription delivery. In December, Uber completed its acquisition of Postmates, which delivers both meals and groceries, in an all-stock transaction. A separate deal to acquire Grubhub, which would made Uber the largest US food delivery service, fell through in the summer. Currently, Uber Eats holds 22% of the US food delivery market, according to research firm Bloomberg Second Measure. The recent purchases suggest Uber wants to make using the platform a habit even after the pandemic subsides.
The moves into delivery come after Uber have been shedding mobility bets. In December, it sold both its self-driving unit, Advanced Technologies Group, and its flying taxi business.
In the pandemic, Uber had been largely propped up by its delivery business. In the third quarter of 2020, Uber’s mobility adjusted net revenue declined 52% to $1.37 billion, while delivery surged 190% to $1.14 billion.