Uber acquires Drizly for $1.1 Billion. Image Source: Shutterstock.
This comes months after Uber had decided to sell its autonomous vehicle research division to Aurora and its flying taxi division to Joby Aviation, halting futuristic ambitions to focus on money making amidst the pandemic that has foundered revenue.
Uber’s food delivery services have seen steady growth due to the new dining restrictions placed in cities around the world, leading to more people ordering meals from the comfort of their homes. In December 2020, the company successfully purchased competitor Postmates for $2.65 billion. The new acquisition of Drizly has been positively received by shareholders, sending Uber’s shares up almost 8%.
“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,” CEO Dara Khosrowshahi said in a press release. “That’s why we’ve been branching into new categories like groceries, prescriptions and, now, alcohol.”
Unlike Uber, Drizly’s business model does not hire any delivery partners, rather, they focus on equipping liquor stores with the necessary technology to deliver their own products. The company has seen a significant increase in growth over the past year. Sales on their platform have grown over 350% compared to the previous year, and in October 2020, Drizly secured $50 million in Series C funding from Avenir Growth Capital.
The Team Behind Drizly
After graduating from Boston College in 2012, a few simple text exchanges between friends, Nick Rellas, Justin Robinson, and Spencer Frazier inspired them to build Drizly. The story, according to Rellas’s Linkedin, goes, “Why can’t you get alcohol delivered? Because it’s illegal, you idiot.”
Before Drizly, Rellas worked for New England Coffee Co. Reporting directly to the COO, his role involved improving strategy and operational efficiency. According to the Craft Beverage Expo, this was when Rellas began to question why technology was so limited in regulated industries.
From there, the trio dedicated themselves to building a licensing software that would allow liquor stores to deliver alcohol legally through a centralized platform. In 2013, Frazier left Drizly and they onboarded Rellas’s cousin, Cory Rellas, who became responsible for managing day to day operations of the company, partnerships, strategy, and recruiting.
The company grew quickly, and in 2014 they secured over $5 million in their seed round of funding from large investors. By 2015, Drizly had partnered with over 150 retailers, earning Nick Rellas and Robinson, who were both 25 at the time, a spot in both the Forbes 30 under 30 Food and Wine list and Wine Magazine’s 40 under 40 list.
A major leadership change occurred in 2018, when Nick Rellas stepped down as CEO of Drizly, making way for Cory Rellas to take over the position. Nick Rellas was to continue to play an important role in the company by sitting on the company board while maintaining relationships with investors according to the Boston Globe.
During this time, the company also expanded its leadership team, adding Scott Braun, an experienced consumer marketer who served as the Global Marketing Director for Proctor & Gamble, as CMO, Joe Grabmeier, a finance and operations executive with over 30 years experience as CFO, and Gabriela McManus as Senior Vice President of People Operations. This change was welcomed by investors, reflected by the $34.6 million the company received in Series C funding from Tiger Global Management that same year.
Problems began to arise when Nick Rellas left the board of Drizly to start his own e-commerce cannabis company in 2018. The Boston Business Journal reported that Nick Rellas had allegedly asked Drizly to invest in his new company and Drizly filed a lawsuit against him, accusing him of violating non-competition and non-disclosure agreements. The lawsuit was later settled, and Drizly founded a sister company, Lantern, that delivers cannabis in Boston and Detroit markets.
In May 2020, the company onboarded Cathy Lewenberg as COO. Lewenberg was previously the Vice President of Digital & Omnichannel Business at CVS Health and her wealth of experience in e-commerce came at an important time for Drizly, as demand for the company’s services skyrocketed during the pandemic. Internally, Jaci Flug was promoted to the position of General Counsel and Senior Vice President of Legal. Flug had played a crucial role in allowing Drizly to expand to new markets.
The Uber Acquisition
Ubers Acquisition of Drizly, which was announced on Tuesday, will see Drizly’s marketplace integrated into Uber Eats while maintaining its separate Drizly app. The acquisition is expected to be completed before the Summer 2021, when Drizly will become a fully owned subsidiary of Uber.
CEO Cory Rellas said about the acquisition, “We are thrilled to join a world-class Uber team whose platform will accelerate Drizly on its mission to be there when it matters—committed to life’s moments and the people who create them,” he said in a press release.
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