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With Uber Deal, Drizly Gains A Massive Platform For Expansion

February 4, 2021

On Tuesday, Uber announced that it was purchasing alcohol e-commerce platform Drizly for $1.1 billion, primarily delivered in the ride share company’s stock. The move, according to Drizly CEO Cory Rellas, will give Drizly access to Uber’s massive platform and allow the company to grow as quickly and efficiently as possible while benefiting consumers and retailers alike. The transaction is expected to be approved before the end of the first half.

Once the transaction is approved by regulators, the next move will be to begin to integrate Drizly’s alcohol delivery service into Uber’s food delivery platform, UberEats. “Drizly will continue to exist, and we hope to accelerate it with the help of the platform that is Uber,” he said. “We’re also going to have many conversations about how we can work to bring Drizly’s category expertise into UberEats.”

While the move gives Uber a strong foothold in the alcohol e-commerce sector, it will not, at this time, enter the cannabis delivery world. Lantern, Drizly’s cannabis delivery service, was not part of the acquisition and was spun off as its own company.

The acquisition, according to Rellas, will be a net positive for retailers working with Drizly, opening up the service to a much larger potential audience within the 1,400 cities in which it’s currently available. “We are hoping to drive more consumers and more revenue and more profits to retailers at the end of the day, by utilizing Uber’s scale in combination with Drizly’s category expertise,” said Rellas.

Day-to-day business for Drizly’s retail partners will largely stay the same. Roughly 80% of delivery drivers are hired directly by local retailers and, according to Rellas, that system will remain in place for the time being. He added that it’s likely that UberEats’ drivers will be the company’s third-party couriers of choice where the company is legally able to take advantage of the partnership for the other 20% of deliveries.

Looking ahead, Drizly plans to build using Uber’s vast membership across both the ridesharing and delivery sides of the business to accelerate its growth and develop a more personal experience for users. “Our experience is very transactional today,” Rellas noted. “And I think we do a good job in that sense and in making consumers smarter when they shop, but we have a long way to go before we’re truly changing behavior and really adding value to the overall shopping experience.”

Last year was a banner year for Drizly, as consumers shifted away from in-person shopping and took advantage of delivery services during the pandemic. “We’re actually growing at a very similar growth rate to what we had grown for 2020 overall,” Rellas said. “I think a lot of what we saw from consumer behavior that we might’ve thought would be novel a couple months in is now becoming a bit more standard and understood.” The holiday season and Q1 2021, specifically, have exceeded the company’s expectations and internal forecasts.

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