Uber has agreed to buy ezCater, a US platform for workplace catering, for $2.3bn in cash. Uber and ezCater announced the deal in a joint statement on Tuesday. The purchase brings ezCater’s catering orders to Uber Eats and to Uber for Business, Uber’s service for company accounts.
Boston-based ezCater lets businesses order food for meetings, events and recurring staff meals from more than 140,000 US restaurants. It generated more than $2.5bn in gross bookings over the past 12 months, with growth in the high teens year on year, the companies said. Its average order is worth more than $400. The business is profitable on a non-GAAP operating income basis.
“Catering is a big business, and can be a huge revenue stream for restaurants,” said Dara Khosrowshahi, Uber’s chief executive.
“With Uber’s reach, we can bring that experience to millions more customers and help restaurants win more of these valuable orders,” he said.
Restaurants, customers and couriers
Uber said restaurants would get larger orders and new diners through the deal. Customers would be able to order food for a group more simply, from workplace meals to events and social gatherings. Couriers on Uber Eats would get “attractive new opportunities to earn”, the company said.
“We’re thrilled to be joining forces with Uber,” said Nihad Rahman, ezCater’s chief executive. “We’re energized to bring our catering and B2B expertise to Uber’s global ecosystem of customers, merchants, and couriers.”
The deal is expected to close in the coming months, subject to regulatory approvals and other closing conditions. J.P. Morgan is advising Uber, and Evercore is advising ezCater.
DoorDash moved into office catering in April
Food delivery makes up nearly half of Uber’s gross bookings and has been growing faster than its ride-hailing business, Bloomberg reported. Natalie Lung wrote that the purchase will also help Uber compete with DoorDash, the largest food delivery platform in the US.
DoorDash launched workplace catering on 30 April through DoorDash for Business. Its catering service takes tray-style orders for meetings and events in San Francisco and New York. A second tool, Meal Manager, handles recurring office meals. DoorDash said large team orders were growing 30% faster than regular orders. It has since added an AI ordering agent inside Apple Messages and a drone delivery system.
The ezCater deal follows other changes at Uber this year. In September, the company said it would cut 10% of its workforce and shut down in Nigeria and Uganda. In August, it partnered with drone delivery firm Zipline.