Uber is making a significant move into the catering business.
The company announced Tuesday that it reached a $2.3 billion agreement to acquire ezCater, a platform for catering and workplace meals, in an all-cash transaction. The deal is expected to close in the coming months, pending regulatory approval and other customary closing conditions.
The acquisition would combine ezCater’s business catering platform with Uber Eats and Uber for Business, giving Uber a larger foothold in a segment that can deliver high-value orders to restaurant partners.
ezCater works with more than 140,000 restaurants nationwide and helps businesses manage food orders for meetings, events, and recurring workplace meals. Its technology also includes tools for managing orders and food spending, along with 24/7 customer support.
Within the past year, chains like Five Guys, Denny’s, Mendocino Farms, and Mission BBQ have joined the ezCater platform.
The company recorded more than $2.5 billion in gross bookings during the trailing 12 months, with growth in the high teens year-over-year. It is profitable on a non-GAAP operating income basis and is expected to be margin accretive to Uber.
The size of ezCater’s transactions also sets the business apart from traditional restaurant delivery. Its average order value exceeds $400.
“We’re thrilled to be joining forces with Uber. Our team is proud of what we’ve built — the leading platform for workplace catering, and a major growth channel for our restaurant partners,” ezCater CEO Nihad Rahman said in a statement. “We’re energized to bring our catering and B2B expertise to Uber’s global ecosystem of customers, merchants, and couriers.”
For restaurants, Uber said the combination could provide access to larger orders and new customers. The deal also gives businesses another way to order group meals through Uber’s ecosystem, covering workplace meals, events, and social gatherings.
Uber Eats couriers are expected to gain additional earning opportunities through catering orders as well.
The transaction connects three pieces of the companies’ businesses. ezCater brings its catering and B2B expertise and restaurant network, Uber Eats contributes its consumer, restaurant, and delivery reach, and Uber for Business provides existing relationships with organizations of varying sizes.
For ezCater, joining Uber offers an opportunity to put its catering technology and restaurant network in front of a much larger customer base.
“Catering is a big business, and can be a huge revenue stream for restaurants,” Uber CEO Dara Khosrowshahi said in a statement. “Nihad and his incredible team have built an amazing platform. With Uber’s reach, we can bring that experience to millions more customers and help restaurants win more of these valuable orders.”
