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Postmates and DoorDash Discuss Merger

Postmates and DoorDash Discuss Merger

SAN FRANCISCO, CA - With profitability a long way off for Postmates, the company may look toward rival DoorDash and its recent investment from SoftBank. According to Recode, multiple sources stated that Postmates and DoorDash have discussed a merger from which position the companies would be better equipped to take on GrubHub, Uber, and Amazon.

The news source reported that the DoorDash CEO Tony Xu and Postmates CEO Bastian Lehmann have discussed the potential deal at least once in the past year and that Lehmann privately expressed confidence in the merger’s occurrence.

DoorDash app

Though there is currently no concrete deal, timeframe, or combined leadership plan, Postmates and its investors are under increased pressure to execute an agreement following DoorDash’s infusion of $535 million from SoftBank, according to Recode. This cash infusion leaves Postmates, who last raised $140 million in 2016, in the difficult position of being one of the least-funded company’s in an industry that includes the massive GrubHub with a public market value of $8.5 billion.

By the year 2022, Morgan Stanley Research Projects, 11 percent of U.S. restaurant sales will come from delivery orders and restaurant delivery will represent a $32 billion market opportunity.

Postmates deliverer

Combined, Postmates and DoorDash would account for 32 percent of the market, still trailing far behind GrubHub’s 52 percent share.

Though Postmates grew 85 percent in 2017, the start-up is still losing 75 million a year. Postmates has also reportedly discussed a sale to GrubHub. DoorDash, declined discussing financials with the news source.

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Postmates DoorDash