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Peeking Into Postmates' Finances

Postmates CEO Bastian Lehmann.

Photo credit: Fortune Magazine, under Creative Commons license

Food delivery service Postmates in on the cusp of a deal to merge with counterpart Uber, which is coughing up $2.65 billion in stock to take over the company. As the merger nears, appropriate filings have been made with the U.S. Securities and Exchanges Commission (SEC), giving a peek into Postmates' finances, information not publicly revealed up until now. Filings with the SEC show that Postmates recorded roughly $321 million in revenue in 2019, but with a net loss of $420 million in the same year. In 2018, the San Francisco-based company reported roughly $156 million in revenue and a net loss of $129 million in that same year. As at the end of 2019, Postmates had $186 million in cash on its balance sheet, after having raised about $900 million in funding up until that point as a private company. In 2019, a year that Postmates sought to go public, the company burned through $335 million in sales and marketing expenses, its highest ever, and compared to $85 million for the same activity in the previous year.

In the first half of this year, Postmates reported roughly $267 million in revenue and a net loss of $105 million, compared to $131 million in revenue and a net loss of $239 million in the same period of the previous year. Sales and marketing has remained a major cost for Postmates, coming in at roughly $138 million in the first half of this year and $176 million in the same period last year. In the second quarter of this year, Postmates posted about $32 million in losses, a record low for the company, and significantly down from $73 million in the first quarter.

Among shareholders in Postmates who stand to reap significant sums from the company's $2.65 billion exit to Uber include investment firm Tiger Global, which owns 27.2% of the company, Founders Fund (11.4%), Spark Capital (6.9%), and GPI Capital (5.3%). Also in line to reap significant sums are Postmates' co-founders, including CEO Bastian Lehmann who owns 3.3% of the company, and CTO Sean Plaice who owns 1.9%. 

Pursuant to Uber's merger agreement, the ride-hailing giant has agreed to provide a $100 million loan to Postmates in up to three respective advances to hold its operations together. Uber has also agreed to a roughly $146 million termination fee in a case where a merger between both companies is not successful. Postmates marks one of Uber's biggest acquisitions since its inception, as it joins the ride-hailing giant to bolster its burgeoning food delivery business, which has itself been sort of a lifesaver to Uber during a coronavirus pandemic that greatly brought down its ride-hailing business. During the second quarter of this year, Uber's food delivery revenues grew 103% year-over-year to $1.2 billion even as ride-hailing revenues went down 67% within the same period.

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