In its bid to expand its fast-growing delivery service into the grocery store market, Uber announced plans to acquire majority ownership of Cornershop. an online grocery provider. Cornershop is a grocery delivery startup that began life serving the Latin American market and recently shifted to offer service in Toronto, its first North American city.
Cornershop was founded in 2015 by Oskar Hjertonsson, Daniel Undurraga and Juan Pablo Cuevas; it’s headquartered in Chile. Cornershop would continue to operate under its current leadership, which would report to a board with majority Uber representation, Uber said in a statement.
Cornershop has rapidly gained popularity in local markets, including Chile, where its shoppers are a common sight scrambling down the aisles of grocery stores as they hunt down orders for customers.
The Cornershop acquisition also shows how Uber is adjusting its
global business. The company recently partnered with Japanese convenience store
chain Lawson for food delivery, but also pulled Uber Eats out of the South
Korean market facing competitive pressures in that country. The addition of
Cornershop adds to its presence across Central and South America.
Uber has differentiated itself from rival Lyft with its sprawling business, which includes meal delivery and freight services in addition to ridesharing.
However, Uber still faces questions from investors and analysts about its ability to turn profitable. In its last quarterly earnings report, Uber saw greater losses and lower revenue than expected. Its stock has dip more than 34% over the last three months, bringing its market cap to $49 billion, a steep decline from its last private valuation of $76 billion ahead of its IPO in May.
Over the course of four rounds of funding, Cornershop raised $31.7 million from investors including Accel, Jackson Square Ventures and others. The on-demand grocery company was supposed to be acquired by Walmart in a deal valued at $225 million announced in September, but that deal ultimately fell apart in June when Mexican anti-trust regulators blocked it from going through.
Meanwhile, Walmart has continued to work with Cornershop, expanding its service offerings in Toronto with the startup as recently as yesterday. Uber has previously experimented with grocery delivery, including in partnership with Walmart, and Uber CEO Dara Khosrowshahi has said that grocery delivery is a natural place for the company to expand its business, given the success of Uber Eats.