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We’re well into the growth-through-acquisition era in the food-delivery industry. Uber’s $2.3 billion purchase of business catering firm ezCater, unveiled on Tuesday, comes just a few weeks after DoorDash snapped up a college campus meal-delivery business for $300 million from Wonder. Neither of these acquisitions will excite many investors, but they signal that Uber and DoorDash are leaving no stone unturned to keep their growth rates humming.
Both companies have been busy consolidating the European food-delivery market, to be sure, buying major players such as Deliveroo and Wolt (for DoorDash) and Delivery Hero (for Uber). But there are only a handful of such companies. And for both Uber and DoorDash—which between them dominate the delivery of restaurant meals and, increasingly, groceries and the like—growth by signing up new subscribers can only get harder.
To be sure, both companies would be doing fine without acquisitions. DoorDash’s bookings growth rate slowed to 19% at the end of 2024 from 36% at the end of 2021 but it has accelerated back to 36% over the past 18 months. While much of that recovery was due to the Deliveroo acquisition, the business had rebounded even before that deal closed. Uber’s food delivery bookings growth also accelerated over the past 18 months, even without the Delivery Hero acquisition (which hasn’t yet closed). But Uber’s ride-hailing business saw a slowdown in that same period.
It’s notable that Uber’s purchase of Delivery Hero is a much bigger purchase than either of DoorDash’s European acquisitions. While Uber isn’t buying all of Delivery Hero, the parts it is buying had gross bookings last year of roughly half Uber Eats. That means the impact on Uber’s growth rate will be more noticeable than what DoorDash has reported.
Both companies have done lots of smaller deals whose impact on the top line isn’t clear. DoorDash, for instance, snapped up SevenRooms, a hotel software firm, last year. Uber, meanwhile, over the past 12 months or so has bought the parking app SpotHero, luxury travel firm Blacklane and a data collection firm for a new AI data labeling business it has started. Both Uber and DoorDash are throwing off lots of cash. It seems they’ve both decided that when an acquisition looks promising, they should go for it!
Skydance is Born
The Ellison family’s Paramount Skydance completed its $110 billion purchase of Warner Bros. Discovery on Tuesday, as scheduled, creating a new company called Skydance. It owns the Warner Bros. and Paramount film studios, HBO Max and Paramount+ streaming services, CBS and a lot of cable channels.
On Wall Street, the new company did not get off to an auspicious start. Shares of Skydance—trading under a new ticker symbol SKYD—fell 25 cents to $9.53, which is quite a bit below the $12-a-share price paid by the Ellison family and a group of other investors who put $47 billion in new equity into the company to help finance the purchase.
The biggest issue for Skydance is its debt. In fact, expect to see news outlets routinely refer to Skydance as “debt-laden,” a favorite description of heavily indebted companies in the past. With $79 billion of debt, Skydance definitely deserves that label.
In Other News
• Goldman Sachs is promoting Jane Dunlevie, a senior tech banker who has worked on deals for OpenAI, Stripe and Instacart, to co-lead the bank’s technology, media and telecommunications investment banking group, according to an internal memo seen by The Information.
• Kling AI, a spun-off unit of Chinese video app Kuaishou Technology, has picked banks for a Hong Kong initial public offering that could raise at least $1 billion, Bloomberg reported.
• Anthropic said it is expanding and restructuring its cybersecurity access programs to enable more cyberdefenders to use its most advanced Claude models to secure their systems against potential AI attacks.
• Pinterest named Amazon executive James Dibbo as chief financial officer. It’s the fourth C-suite shakeup for the social media firm this year
Today on The Information’s TITV
Check out today's episode of TITV in which Akash Pasricha speaks with Reflection co-founder Ioannis Antonoglou.
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