Uber plans to add alcohol delivery to Uber Eats with $1.1B acquisition

By acquiring the 8 year-old startup Drizly, Uber continues to expand Uber Eats into new categories.

Uber on Tuesday announced its plans to acquire Drizly, a startup that offers on-demand alcohol delivery, for $1.1 billion. The move lines up with Uber's efforts to expand its own delivery services as its ride-hailing services continue to struggle through the pandemic. 

Uber expects to pay for Drizly almost entirely with shares of Uber common stock. The deal is expected to close within the first half of the year.

Uber Eats has been a bright spot for Uber, since the COVID-19 pandemic upended its business last year. Leaning into Uber Eats' growth, the company in December finalized its $2.65 billion acquisition of the delivery service Postmates.

"Wherever you want to go and whatever you need to get, our goal at Uber is to make people's lives a little bit easier," Uber CEO Dara Khosrowshahi said in a statement. "That's why we've been branching into new categories like groceries, prescriptions and, now, alcohol."

Drizly was founded in 2012 and has established a footprint in more than 1,400 cities in the US. It claims to be fully compliant with local regulations, giving consumers a way to have beer, wine or spirits delivered to their door. Rather than hiring its own drivers, Drizly provides a marketplace for local merchants. Retailers can sign up as Drizly Retail Partners, while producers can also sign up with Drizly to ramp up their e-commerce business. 

In his statement, Khosrowshahi said Drizly is "profitably growing gross bookings more than 300 percent year-over-year."

Once the deal is closed, Drizly will be a wholly owned subsidiary of Uber. Its marketplace will be integrated into the Uber Eats app, but the standalone Drizly app will continue to exist.