Uber to acquire majority stake in grocery delivery company
Uber is on a mission to broaden its delivery services by acquiring a majority ownership stake in Cornershop, an online grocery delivery business currently serving Latin America.
The move, announced Friday, marks an ambitious effort by the company to go beyond its ride-hailing and restaurant-delivery business by tapping into the grocery store market.
The company said the deal is expected to close in early 2020. The exact valuation of the deal has not yet been disclosed.
The deal comes just after Mexican antitrust officials blocked Walmart’s $225 million bid to buy Cornershop due to concerns that the company could not guarantee a level playing field with its competitors, according to The Wall Street Journal.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UBER | UBER TECHNOLOGIES INC. | 71.11 | +1.47 | +2.11% |
Within the company’s Securities and Exchange Commission filings, Uber Eats was listed as one of their key growth strategies of which they intended to continually invest in and expand beyond its current offerings.
As it stands now, Uber Eats offers restaurants an instant mobile presence and efficient delivery capability of which the company says “generates incremental demand and improves margins for restaurants by enabling them to serve more consumers without increasing their existing front-of-house expenses” according to securities filings.
As of December 2018, the company served more than 220,000 restaurants in over 500 cities globally. However, the recent acquisition of Cornershop will allow Uber to go beyond serving restaurants, delivering groceries to millions of consumers.
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“Whether it’s getting a ride, ordering food from your favorite restaurant, or soon, getting groceries delivered, we want Uber to be the operating system for your everyday life,” said Uber CEO Dara Khosrowshahi.
Under terms of the agreement, Cornershop will continue to operate under its current leadership, reporting to a board with majority Uber representation.
Cornershop CEO and founder Oskar Hjertonsson reiterated the partnership will aid in their goal of bringing "unique flavor of on-demand groceries from incredible retail partners to many more countries around the world."
“In 2015 we started Cornershop with primarily the Latin American market in mind and we couldn't be more excited to work with Uber to help us take that mission much further,” said Hjertonsson.
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