A half-dozen American food-delivery companies are battling for dominance.
Consolidation seems inevitable. The US doesn’t need so many venture-backed companies in an industry defined by low margins, similar services, and fickle customer loyalty. And yet no end has appeared in sight.
But Recode has learned that one of the most prominent of these startups, Postmates, has explored a sale instead of becoming a standalone public company, which it announced plans to do so in February.
Staring at a public market that has been unkind toward consumer IPOs like Lyft and Uber, Postmates in recent months has had persistent talks with many of the likeliest acquirers in the space, including DoorDash, Walmart, and Uber, which operates UberEats, according to multiple sources. The clearest sign that Postmates — which was expected to be the next hot consumer-industry IPO — has seriously considered a sale: It has been working with Qatalyst Partners, the boutique investment bank famous for selling tech companies, people familiar with the matter told Recode.
Postmates is trying to keep its options open: It has also been considering following through with its much-delayed IPO, or raising a private round of financing that could push its IPO even further out, these sources say.
A Postmates spokesperson said it disputed Recode’s reporting but declined to specify on the record what the company actually was disputing. The company pointed to Second Measure data that showed Postmates is growing faster than UberEats and GrubHub nationally, while remaining especially popular in places like Los Angeles. Postmates has about 10 percent of total market share across the US.
“Eventually, you’ll probably see some consolidation, and I think we always like to think a few steps ahead. Is there a super company that we could create that would make a lot of sense?” Postmates CFO Kristin Schaefer said in February, just before the company filed to go public. “But at the same, we don’t have to take that path.”
Why does this matter? Well, an acquisition could affect the prices that Americans pay for food delivery. On one hand, it could allow for dominant players like UberEats to achieve cost savings that would make your dinner cheaper. Or maybe it would remove needed competition and allow middlemen to raise your prices.
It could also shape the reinvigorated conversation around labor rights in Silicon Valley. Delivery startups like Postmates have drawn recent criticism for their relationships with couriers, who deliver more than food and technically are contractors rather than employees. That classification has been criticized by workers’ right groups because it deprives them of certain benefits that full-time employees enjoy. If Postmates sold to a competitor like DoorDash or Uber, both with their own controversial workers’ practices, the situation for their workforce of contractors might get worse rather than better.
And lastly, if Postmates were to sell, it would also reveal some aftershock of how Uber and Lyft’s disappointing IPOs are impacting the plans of other high-profile IPO prospects.
As of now, Postmates appears still slated to head public, albeit on a much-delayed schedule. One person briefed on Postmates’ plans said that it very much is trying to avoid an IPO and that its first choice is to be bought — if a deal can be arranged at the right price. Others close to the situation insist Postmates is “full-steam ahead” on preparing for an IPO.
Either way, the acquisition talks help explain why Postmates — five months after stating very publicly that it planned to IPO — has not visibly taken some of the steps required to pursue that action.
All this back-and-forth with potential acquirers comes amid signs that Postmates could have trouble on Wall Street. Some analysts who met with Postmates in recent months told others in the industry that they had concerns over the company’s financial footing, according to people familiar with the matter. Those concerns, however, were not shared with Postmates, its board or its bankers directly, and so the sources say it did not affect Postmates’ IPO timing.
One of Postmates’ IPO meetings with Wall Street, its modeling day, was also pushed back at least once this spring, a delay that made some investors and analysts “queasy,” according to one of those sources.
These would not be the first investors to raise concerns about the food-delivery sector, which has historically been considered to be one of the toughest businesses in online commerce. The companies’ independence has created a scattershot network of regional dominions, with companies like GrubHub dominant in Chicago and New York, where it owns Seamless, and with Hollywood-stamped Postmates practically a verb in Los Angeles.
So Postmates has been surveying and pursuing other options.
It’s not uncommon for a company to at least explore a sale even as it prepares to go public. Startups often will pursue multiple strategies at once, and sometimes they do sell at the last minute before they hit the public market.
Postmates and Qatalyst have also fielded some interest originating from potential acquirers, people familiar with the matter say. But in a small sector where nearly all of the competitors know one another intimately, it can be a thin line between any inbound interest and organic talks that emerge from dinners or drinks.
The company or its bankers have had talks with at least three possible suitors, according to people familiar with the matter:
- Postmates informally spoke with Walmart, which could potentially use a last-mile delivery provider, about a possible deal. But Postmates’ likely asking price makes such a tie-up unlikely for Walmart. (One person said Postmates was seeking a deal that valued itself at around $2 billion, which would be not much more than the company’s most recent private valuation.)
- The most serious talks seem to have been with Uber, though it’s not clear who reached out to whom. But both sides expressed mutual interest. The Uber talks have been accelerated by the increased involvement of Qatalyst, which has a “fee tail” — or the lagging right to collect fees if the company is sold — from when it was hired in 2016 to explore a possible sale of Postmates. That tail encourages Qatalyst to get a deal done. J.P. Morgan, the bank leading Postmates’ IPO, has not been involved in the attempts to sell the company.
- Postmates has also had some discussions about a possible sale earlier this year with DoorDash — which was once Postmates’ fiercest rival in the US but has since pulled away in national market share thanks to billions of dollars of venture capital led by SoftBank. These conversations were through intermediaries and did not rise to the level of DoorDash’s board of directors, another person said, suggesting they never went particularly far.
All of these parties declined to comment.
This may not be the end of the story. Postmates has discussed merger scenarios with DoorDash and GrubHub before, and it may be easier for some of these companies to combine once they all become public, as Uber now is. But one lingering holdup for Postmates could be whether its CEO, Bastian Lehmann, is willing to work as a subordinate to someone else, said a person close to the company.
In the meantime, though, Postmates’ slow schedule has confused some in Silicon Valley and Wall Street, who wonder whether it speaks to a desire to avoid a near-term IPO altogether.
When Postmates in February announced that it had confidentially filed to go public, people expected it to charge toward an IPO immediately. But five months later, the company has yet to even unseal its S-1, its prospectus with the Securities and Exchange Commission, which is an unusually long amount of time to sit in limbo, IPO experts told Recode.
People close to the company point to a few factors for the delay, ranging from the acquisition talks to the winter government shutdown to the birth of Lehmann’s first child.
There is no doubt, though, that the recent lackluster performances of other consumer startup IPOs weighs on how Wall Street might assess the next one. That has also been yet another cause for the delay. Postmates has closely watched Uber struggle in its first months as a public company, viewing this as a sign of investors’ appetites for another food-delivery business — although obviously one without a core business in ride-hailing.
What could push the IPO timeline out even further is if Postmates chooses to raise more money from private investors instead, which the company has considered doing, according to people familiar with the matter. The food-delivery startup — which has already raised almost $700 million — feels it has seen better-than-expected success with its most recent round of fundraising, $100 million collected in January, and that it might make sense to wait out the IPO until it can use that money — and more money in the future — to produce improved financials, people said.
Few major IPOs occur during the vacation-filled weeks of summer, which means Postmates would probably be headed for an IPO after Labor Day at the earliest. And Postmates has spent the summer trying to get its house in order just in case it does want to pull off a small IPO.
The company has been publicly recruiting a head of investor relations to “play a key role in preparing Postmates to become a multi-billion dollar public company.” And just two weeks ago, the company added a new independent member to its board — another unusual, last-minute step for a company that is already in IPO registration — but one that shows that the company is not dead-set on finding a buyer.
And the company has been preparing its shareholders for the typical “lockup period,” distributing paperwork to employees and investors earlier this year about the lockup, which prevents shareholders from selling for a certain amount of time. That document signaled that the lockup would begin by the end of June, or else the paperwork would become ineffective, according to people familiar with the matter.
But that timing, too, has been pushed back. Two weeks ago, coming up against that deadline, the company told those shareholders that it would delay the start date of that lockup period by several months.
Recode and Vox have joined forces to uncover and explain how our digital world is changing — and changing us. Subscribe to Recode podcasts to hear Kara Swisher and Peter Kafka lead the tough conversations the technology industry needs today.
20 Texts That Prove a Relationship Is Not an Easy Game
Chats make our relationships more exciting and unpredictable! 25% of couples sometimes even text their partner when they are both home together. It’s very difficult to say goodbye to text messaging because so many funny and amusing things go on there!
We at Bright Side also love to laugh at digital chatting situations between couples and want to share with you a new genre of humor.
Do you also have chats like this with your partner? Please, share your stories below!
Marvel Phase 4: Black Widow, Doctor Strange 2, Thor 4 schedule revealed
For the first time in years we finally have an idea of what Marvel Studios has planned for the next phase of the Marvel Cinematic Universe.
The studio revealed its upcoming schedule during its Hall H panel at San Diego Comic-Con on Saturday night, announcing at least 10 projects to expect over the next two years. The biggest revelations include the news that Natalie Portman will wield Thor’s hammer; Mahershala Ali will star in a new Blade project; and a confirmation from Marvel that it’s working on movies featuring some of the studio’s recently acquired characters.
Marvel’s business plan and marketing strategy has long been to hype what’s next, with much of that hype being driven by its signature post-credits scenes and panels at fan conventions like Comic-Con or Disney’s D23. And for awhile, it was customary for the studio to announce its release schedule several years early — in 2015 Marvel announced movies like 2018’s Black Panther and 2019’s Captain Marvel.
But even the studio’s two most-recent films — April’s colossal cinematic juggernaut known as Avengers: Endgame and this month’s Spider-Man: Far From Home — arrived in theaters, Marvel still hadn’t revealed what movies it’s launching in 2020, or if it plans to launch any at all. Meanwhile, the studio had kept relatively quiet save for a few casting and crew announcements (like we found out this week that Taika Waititi would be directing the fourth Thor movie).
Here’s what Marvel announced during its Comic-Con panel:
- Black Widow, starring Scarlett Johansson and Rachel Weisz and directed by Cate Shortland, arriving in theaters on May 1, 2020
- The Eternals, starring Angelina Jolie and Salma Hayek and directed by Chloe Zhao, arriving in theaters on November 6, 2020
- Shang-Chi and the Legend of the Ten Rings, starring Simu Liu and directed by Destin Daniel Cretton, arriving in theaters on February 12, 2021. Shang Chi will be Marvel’s first film with a lead character of Asian descent.
- Doctor Strange in the Multiverse of Madness, starring Benedict Cumberbatch and Elizabeth Olsen (yes, Scarlet Witch) and directed by Scott Derrickson, arriving in theaters on May 7, 2021
- Thor: Love and Thunder, directed by Taika Waititi and starring Natalie Portman (who will wield the legendary hammer as the first female Thor), Tessa Thompson, and Chris Hemsworth, arriving in theaters on November 5, 2021
Marvel studios president Kevin Feige also confirmed upcoming movies involving the Fantastic Four and the X-Men’s mutants — characters who were previously owned by Fox, but which now fall under Marvel’s purview thanks to the recent Disney-Fox merger. He also confirmed that the sequels for Black Panther and Captain Marvel, are in development. Black Panther is Marvel’s biggest solo superhero movie to date, having made $1.3 billion worldwide, and Captain Marvel, its first solo superhero film to center on a female hero, also passed the $1 billion mark.
Vying for the biggest surprise of the evening was Feige bringing Mahershala Ali to the Comic-Con stage to announce a new Blade project. Ali previously appeared as the villain in Marvel’s Netflix series Luke Cage, so the new Blade film project possibly signals that Marvel’s television projects with Netflix and its cinematic universe are completely separate entities.
Marvel also revealed its television series lineup for Disney’s forthcoming streaming service Disney+, which is scheduled to launch in November:
- The Falcon & Winter Soldier in fall 2020
- WandaVision in spring 2021
- Loki in spring 2021
- WHAT IF …? — an animated series featuring characters from the MCU in summer 2021
- Hawkeye in fall 2021
For fans who can’t wait until 2020 for Marvel’s next best thing, rest assured. The studio will probably have more surprises to share next month — and perhaps even first-look footage or concept art from its upcoming projects— at Disney’s D23 convention, which will take place from August 23 to 25, 2019 in Anaheim.
23 Moving Photos That Prove Our Moms Deserve All the Love in the World
From creating cosplay costumes for us and making lunches for all of our friends to giving us everything they’ve got, mothers never fail to surprise us! Their imagination and wit have no limits, as they always know how to find a solution to any situation, even if their resources are limited and time is short. No matter how old we get, we’ll always stay kids in our mothers’ eyes and they’ll always rush to help us, even if we’re 30 years old.
Bright Side wants to admire our moms, which why we’re so happy to give you 23 photos where people captured moments of being emotional, clever, brave and strong.
1. After giving birth, a mother laughs hysterically at her husband who just fainted at the sight of their newborn son.
2. “Little me knew exactly how to show appreciation for my mother.”
3. Proud mom with her graduated son
4. “My mom gave me a kidney 2 years ago. All I can give her are flowers.”
5. This clever single mother dressed up as a dad to take her kid to “Donuts With Dad” day at school.
6. She has 3 daughters and she writes 5 lines a day to each of them. These will be gifts when they get married one day.
7. This mom poses as a power ranger with her son. You don’t need to be a child to know how to have fun!
8. A homeless mother is dressing her daughter for school.
9. “My friend’s mom made my turtles sweaters.”
10. “A coworker said her mom made lunch for the office. We accepted.”
11. The best cosplay is when your mom decides to participate in it too.
12. “I told my mom I was really sick today. An hour later she showed up at my house with this. I’m 30.”
13. “I’m a teacher in Canada and my mom made me this scarf to keep me warm.”
14. A daughter surprised her mother with an early return from deployment. Her mother’s emotions are priceless.
15. “Yesterday my mom ran for the first time in 9 months since the Boston Marathon bombings. She’s my inspiration!”
16. “Jokingly, I sent my mom a cutout of myself while I was studying abroad. She seems to be entertaining herself with it.”
17. “This is one of my favorite pics of my mom even though she isn’t in focus. Hope you guys enjoy it.”
18. “My mom smiling after saving 40 kids from a burning school bus today”
19. “Look at this giant blanket my mom crocheted!”
20. “This is how my mom greeted me at the airport after having not seen me for a few years. She made me walk through the entire airport under her left arm.”
21. “My mom and I have always bonded over GoT. This year she made me these cakes for my 30th ’name day’.”
22. “My father passed away from lung cancer in July. Mom had these gifts made for me and my brother. The best gift I’ve ever received.”
“This is a shirt I used to wear, and when you hold it I’ll be there. Love, Dad.”
23. “My mom graduating with her Ph.D. in social work from Tulane. Her goal was to graduate by 60 and she did it with a year to spare.”
BONUS: Moms are always the same, loving and caring for everyone.
Which photo did you like the most? Do you have an adorable photo of you with your mom? Let’s share them in the comment section!
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