Dive Brief:
- Uber Eats has entered into an agreement to acquire ezCater in an all-cash transaction worth $2.3 billion, the companies said in a joint press release.
- The transaction is expected to close within the next few months.
- The deal will combine ezCater’s catering and business-to-business expertise with Uber Eats’ global reach with consumers and restaurants, expanding ezCater’s presence to millions of more customers.
Dive Insight:
EzCater currently partners with over 140,000 restaurants and generated over $2.5 billion in gross bookings over the trailing 12 months, according to the company, and it has grown in the high teens year over year. The business is profitable on a non-GAAP operating income basis and is expected to be “margin accretive,” the press release said.
By adding catering to Uber Eats, restaurants will have access to a channel to grow large orders and add new diners, per the release. It will also add more options for customers looking into catering for various workplace and social gatherings and create additional opportunities for Uber Eats couriers to gain more revenue.
The press release didn’t say how ezCater will be integrated into Uber Eats’ platform or if the two entities will remain separate businesses. The companies declined to comment beyond what is in the press release.
This acquisition is also in line with Uber Eats’ expansion of the occasions it serves through delivery. During the second quarter, the company’s large order and pickup channels, which “present a massive addressable opportunity,” reported strong growth, allowing Uber to expand delivery beyond individual meals, Uber CEO Dara Khosrowshahi, said in an earnings report.
Catering has become an important growth driver for many restaurants, particularly as it is highly profitable. Average order values for ezCater are over $400. Various chains, including Denny’s, Del Taco, Sweetgreen and Five Guys, have added or expanded catering this year.
Adding catering will also make Uber Eats more competitive against DoorDash, which has also been expanding its business through acquisitions. In September, DoorDash said it would acquire Grubhub’s college campus business for $300 million. Last year, it acquired SevenRooms for over $1 billion and has since added dine-in and reservation management services to its platform.
