Uber, the ride-hailing and food delivery company, has agreed to buy US corporate catering platform ezCater for $2.3 billion in cash, its latest move to strengthen a delivery business that has become its fastest-growing revenue stream.
EzCater, founded in 2007, operates a marketplace that allows companies to order food from caterers for workplace meals, meetings and corporate events, with average order values exceeding $400.
The platform generated more than $2.5 billion in gross bookings over the past 12 months.
Targeting the corporate market
The acquisition combines ezCater's catering operation with Uber Eats' restaurant network and Uber for Business' existing corporate client base.
Uber's business-focused segment already posted gross bookings growth of more than 40% in the second quarter, and analysts expect the deal to extend that momentum.
"Bringing workplace buyers into the ecosystem supports the membership flywheel," said Scott Devitt, analyst at Rosenblatt Securities.
Narrowing the gap with DoorDash
DoorDash holds the majority of the US food delivery market, and the ezCater deal is designed to help Uber close that gap by adding a line of high-value group orders largely funded by corporate expense accounts rather than individual consumers.
Delivery accounted for roughly 37% of Uber's total revenue in the second quarter.
Broader context
The ezCater purchase follows Uber's agreement in July to acquire German food delivery firm Delivery Hero in a $14.8 billion transaction intended to create the largest food delivery group outside China.
Uber's shares have fallen 15% this year as investors weigh the longer-term threat from autonomous vehicles to its core ride-hailing business.
The ezCater deal is subject to regulatory approval and is expected to close within months.
