Eight years ago, when they put alcohol on an eCommerce platform, Drizly ended the American Institution known as “older brothers’ beer runs.” The new Uber and Drizly mashup now looks to put drinking and driving out to pasture as well.
Uber and Drizly seem like such a lovely couple. Why not add Drizly’s drinks to the Uber marketplace, alongside Rides and Eats? Drizly is a big winner, too, as it immediately expands its reach at no financial cost.
Quick Facts about the Acquisition
Uber bought Drizly for $1.1 billion in a cash-and-stock deal, but mostly for stock. As a result, more than 90% of the consideration coming to Drizly shareholders will consist of shares of Uber common stock, and will pay the balance in cash.
Interestingly, Uber’s stock was UP 8% on the news of the acquisition. (Usually, the acquirer’s price falls on this news, at least temporarily, to account for the cost of the acquisition.) That means the market was unusually receptive to this deal.
“Why Can’t You Get Alcohol Delivered?”
And with that one question, Drizly was born. One set of friendly entrepreneurial imbibers decided to create a three-tier compliant system to get alcohol delivered right to their (and your) doorstep. The three-tier system is producer/importer -> distributor -> retailer.
Credit: Beverage Trade Network
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How did Drizly grow?
Well, I’m sure an MBA would have a load of numbers, tables, and charts for your review. But let’s face it, people love booze. They love it even more when they don’t have to leave their houses to get it. Simple. Like bringing fire to cavemen.
Drizly grew to become the largest online marketplace for alcohol in North America. Drizly partners with thousands of retailers in more than 1,400 cities. And Drizly is available to 100M+ customers across the U.S. and Canada.
But for aspiring e-commerce entrepreneurs, pay attention to this. What set Drizly apart from the rest was doing the little things right, such as:
- A rich e-commerce shopping experience
- Personalized content
- Competitive and transparent pricing
- Unrivaled selection
These are things you can do with your Amazon store today.
And that’s when the magic happens…
“You must always find a market first…. and THEN concentrate on a product!” - Gary Halbert
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Turning Uber’s Head
Every e-commerce business owner and tech entrepreneur dreams of getting “the big call.” “Google wants to buy us!” “Apple wants to partner with us!” “Facebook wants to use our tech!”
Drizly simply couldn’t have gotten a more welcome phone call. The company that revolutionized ride-sharing, and added food delivery to their service, now wanted to add alcohol to their portfolio.
Here’s what Uber CEO Dara Khosrowshahi had to say:
Wherever you want to go and whatever you need to get, our goal at Uber is to make people’s lives a little bit easier. That’s why we’ve been branching into new categories like groceries, prescriptions, and, now, alcohol. Cory and his amazing team have built Drizly into an incredible success story, profitably growing gross bookings by more than 300 percent year-over-year. By bringing Drizly into the Uber family, we can accelerate that trajectory by exposing Drizly to the Uber audience and expanding its geographic presence into our global footprint in the years ahead.
The deal will close by the end of next quarter. With that, Drizly CEO Cory Rellas and his team will now work for Uber and be a lot richer for it. Their employment terms aren’t public yet. But since an Uber stock payout will cover most of the consideration of the transaction, they’ll have the vested interest and motivation to keep growing their baby inside the Uber ecosystem.
How will this merger play out next Dry January?
This is just one big story in the world of e-commerce acquisitions. And who knows? Maybe your company will be next.
In this case, the target’s team will become a part of the bigger company, much like Instagram and Facebook.
But you may choose another path. If you sell your e-commerce company for cash, you can take that capital, invest it, and be set for life.
The point is this: build something that’ll make your clients jump up and down with glee. It’ll grow like wildfire. That’s what captures the big elephants’ attention. That’s how you create real wealth.
If you’re ready to get started, we’d love to help!