Emailed on July 10, 2020 in The Friday Forward

Uber (NYSE: UBER) agreed to buy food delivery rival Postmates for $2.65 billion in stock. Uber also will invest an undisclosed amount of money into Postmates ahead of the anticipated Q1 2021 close.

• Why it’s the BFD: This is Uber’s set of steak knives, after failing last month to acquire Grubhub.

• ROI: Postmates had raised over $900 million from firms like Founders Fund, Spark Capital, Uncork Capital, and Tiger Global Management. This includes a $225 million infusion last fall at a $2.4 billion post-money valuation. It had been in talks to raise another $100 million, but no such deal has occurred.

• Market reax: Uber stock opened today up more than 8%.

• The bottom line: It’s not yet clear that consolidation can flip the upside-down economics of food delivery, despite what Uber says will be $200 million in synergistic savings. Well, outside of price increases that would draw the ire of antitrust regulators.