Uber buys catering platform ezCater for $2.3 billion
Uber agreed Tuesday to buy ezCater, a Boston company that delivers group meals to offices, for $2.3 billion in cash. The deal pushes Uber Eats into workplace catering, where ezCater's average order tops $400. The deal still needs approval from regulators before it can close.
Uber wants to feed the office meeting, and the company agreed Tuesday to buy ezCater, a leading U.S. platform for catering and workplace meals, in an all-cash deal valued at $2.3 billion, the two companies said.
ezCater lets businesses order food for groups from more than 140,000 restaurants across the country. Think lunch for a sales meeting or trays for a company event. TechCrunch compared it to "an Expedia for catering."
The business is big: ezCater handled more than $2.5 billion in orders over the past 12 months, growing in the high teens from a year earlier. Its average order is over $400. The companies said it already turns a profit on an adjusted basis.
"Catering is a big business, and can be a huge revenue stream for restaurants," Uber CEO Dara Khosrowshahi said. He said Uber's reach could bring ezCater to millions more customers.
ezCater CEO Nihad Rahman said his team was "thrilled" to join Uber.
The plan ties ezCater to Uber Eats and Uber for Business, which handles rides and meals for companies. Uber said restaurants would get larger orders and couriers would get new ways to earn.
Some background: ezCater was founded in 2007. It ran for seven years without outside money before raising its first $4 million in 2014, TechCrunch reported. That makes this a huge payday for a company that started small.
The deal is the latest in a string of food bets by Uber. It is also in the process of buying Delivery Hero for $15 billion, TechCrunch said, and is investing in drone delivery companies like Zipline and Flytrex.
The deal is expected to close in the coming months. It needs regulatory approval. Uber hired a separate law firm to handle antitrust reviews around the world.
What we know: Uber is paying $2.3 billion in cash for a profitable catering platform.
What we don't: Whether regulators will raise concerns as Uber adds more food deals.
Where outlets agree TechCrunch and the companies' release both say Uber is paying $2.3 billion in cash and that ezCater handled more than $2.5 billion in orders over the past year.
Where they differ The companies say the deal closes in the coming months, but the regulatory review has not started in public, so the timing is not settled.