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On Demand Businesses 101

Postmates to Release IPO filing in September: Another unicorn goes Public

While initial reports suggested talks between Postmates and DoorDash for Postmates M&A Exit, it looks like because of the lack of mutually favorable terms, Postmates will release its IPO filing in September.

Doordash has proceeded to acquire Caviar and Postmates filed to the U.S. Securities and Exchange Commission in February, confidentially. Given the fact that it is relatively easier to develop a full-stack delivery app in no time, the competition has risen manifold and it appears a carefully thought move by Postmates.

What’s happening right now? 
Postmates is up against strong competition from major well-funded players like UberEats and GrubHub who together held a 72%  share of the entire food delivery market in April 2018. Had the merger between Postmates and DoorDash happened, together they would have held a 23% share of the market. 

“We can’t comment on the IPO process and we don’t comment on rumor or speculation”

Postmates’ Spokesperson

The Bank of America Corp. and JP Morgan Chase will serve as lead underwriters, according to Bloomberg. However, additional details of this floating – including the size and pricing of the proposed offering are yet to be made public.  

Meanwhile, Postmates discreetly set up a Canadian office, hiring staff for both Toronto and Vancouver.  

Funding and Acquisitions: 
Postmates, to date, has raised $681 Million in its latest round of funding coming in during the beginning of this year, bringing in the total valuation at $1.85 Billion.

While Postmates is getting ready for its IPO, multiple consolidations are happening in the food delivery business globally. Doordash acquired Caviar, UberEATS venturing into grocery delivery, Aramark acquired GoodUncle– all in less than 10 days.

How Postmates will fare on the public markets:

The concern is still up for debate- wherein Postmates will now be in the running for a neck to neck competition with other billion dollar companies in the public space, including maestros like Uber and GrubHub. 

Read more about the Postmates business model and how they work.

Other Private Unicorns that went Public:

The year 2019 has seen a lot and most notable of Silicon Valley unicorns go from Private to Public. These include Lyft, Uber, Pinterest and many others; now adding Postmates to the list as well. 

Postmates’ followed immediately as WeWork’s plans to make their IPO prospectus available got in public purview. WeWork hopes to raise close to $3.5 Billion; both occupying unproven categories. 

Postmates, was founded in 2011 by Bastian Lehmann, is backed by Spark Capital, Founders Fund, Uncork Capital, Slow Ventures, Tiger Global, Blackrock and others.

This piece is based on reports from TechCrunch and Bloomberg. 

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