Uber takes over alcohol delivery company Drizly for $ 1 billion

The Uber car transport service will soon provide more than just passengers.

Uber said it acquired alcohol delivery startup Drizly for $ 1.1 billion in stock and cash. Drizly is an on-demand alcohol market, working with local regulations in over 1,400 US cities. The company offers a wide selection of beers, wines and spirits.

Growing steadily since its launch in 2012, Drizly became a pandemic darling last year, as coronavirus shutdowns led to a frenzy of consumer spending on alcohol. Last March, at the start of the shutdowns in the United States, Boston-based Drizly told the Wall Street Journal that sales were “461% higher in the last week of March than expected, with 41% of recent orders from new users. At the time, chief executive Cory Rellas told the WSJ he expected online sales to increase to 8% of all alcohol purchased, from 2%. According to the latest press release, Drizly has seen its gross bookings increase by over 300% year over year.

Supported by a 350% sales increase, Drizly noted $ 50 million in a Series C round led by Avenir last August.

Drizly was poised to ride the coming wave of consumer e-commerce trends already in place but being accelerated by closures. Last summer, the company said it was anticipating 20% of offsite alcohol purchases are made online in the next five years, compared to 1% in 2019.

A December report from the IWSR Beverage Market Analysis backed up Drizly’s instincts. IWSR predicts that e-commerce pandemic trends will continue to grow this year; the firm predicts that the value of alcohol e-commerce grew by 42% last year, in 10 major markets, to a total of $ 24 billion.

This trend is partly due to young consumers who are comfortable ordering everything from their phones; Contactless and socially remote shopping requirements of the past year have only reinforced the trend.

In 2019, online alcohol sales accounted for just 1% of retail sales in the United States. IWSR predicts that e-commerce alcohol sales will eventually reach 7% of total non-commerce volume by 2024.

Drizly complements Uber’s other on-demand delivery service. Last July, the car service purchased Postmates in $ 2.65 billion all-stock deal; The acquisition made Uber the second-largest restaurant delivery service after DoorDash, according to the Wall Street Journal.

Uber stock (NYSE: UBER) rose to the news, currently trading 7% above the open.

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