Uber Technologies announced Tuesday it would acquire U.S. catering platform ezCater in an all-cash deal for $2.3 billion, marking a venture into a new area – in its latest move to strengthen delivery, the company's fastest-growing business segment.
The deal comes months after Uber agreed in July to buy German firm Delivery Hero in a $14.8 billion transaction aimed at creating the largest food delivery group outside China.
Founded in 2007, ezCater lets companies order food from caterers for corporate events, meetings and workplace meals. It generated more than $2.5 billion in gross bookings over the past 12 months, Uber said.
The deal would combine ezCater's catering business with Uber Eats' restaurant network and Uber for Business' corporate customer base, the company said.
Uber Eats has a wider global reach, but DoorDash holds the majority of the U.S. food delivery market, according to analysts, and the ezCater deal is expected to help Uber narrow that gap.
Uber said ezCater's average order value exceeds $400 and the deal is expected to boost margins.
The acquisition adds a new line of business built on high-value group orders paid for by companies, expanding Uber's business-focused segment, whose gross bookings grew more than 40% in the second quarter, Rosenblatt analyst Scott Devitt said.
"Importantly, bringing workplace buyers into the ecosystem supports the membership flywheel," Devitt said.
The ride-hailing and delivery company's shares have fallen 15% this year as investors weigh how well it can compete once robotaxis begin to reshape the ride-hailing market.
Uber's delivery segment accounted for about 37% of total revenue in the second quarter and has been its biggest growth driver in the recent past.
The deal is subject to regulatory approval and is expected to close in the coming months.
