As food delivery hopefuls like Deliveroo and Amazon get more involved in the making of food themselves, Uber’s food delivery branch Uber Eats has made an acquisition that could see the company also producing more of the product it’s bringing to its customers. Ando — the delivery-only ‘restaurant’ founded by Momofuku chef David Chang — announced today that it has been acquired by Uber Eats.
The move comes at a time of growth for Uber in the food delivery category. “We’ll be the largest food delivery company in the world this year,” Uber CEO Dara Khosrowshahi said today at DLD in Munich.
According to the notice on Ando’s homepage, the company is shutting down its service — live only in New York — effective immediately as it begins to integrate with Uber Eats.
Since launching in May 2016, the company had been working with Uber Eats as a delivery partner, alongside other delivery services and a few of its own people.
Ando doesn’t say outright what its role will be at its new parent. “We’ve worked with Uber to power our delivery from the start, and we’re excited our team and technology will play a role in their vision of building the world’s leading food delivery service going forward,” it writes in its note announcing the sale.
But there is probably a strong clue in Ando’s premise that this will be about Uber Eats stepping up its game in terms of what is actually being delivered.
Ando was founded to reinvent food delivery by focusing on producing grub that would simply be better suited to the task — “from the actual pH balance of the food to the packaging itself,” in the words of Jordan, playing on food tech and optimising the experience, in addition to playing on favorites from Chang’s own hugely successful restaurants, such as bibimbap, cheesesteaks and fried chicken.
But food delivery is a tough business — a lot of competition that results in thin margins as companies rush to try to acquire customers from each other and keep them from leaping to the next good deal from another rival. That has led to a lot of companies shutting down or getting gobbled up by rivals.
Deliveroo has been working on ways of changing up the model by developing satellite kitchens to prepare some of the food closer to where it would be distributed, and last year it acquired Maple to help with that ambition.
Amazon Restaurants, meanwhile, has continued to work on the model of being the delivery component to its restaurant partners — but you have to wonder what it might have up its sleeve longer term, given its ownership of Whole Foods and how it might leverage that to deliver food of its own.
Uber Eats, by acquiring a startup that has clear expertise in making hit dishes, is bringing in talent that can help it potentially explore or outright build its own service to differentiate from the rest of the pack.
Ando had raised $7 million in funding after being incubated at Expa (itself cofounded by one of Uber’s founders, Garrett Camp), with investors including Box Group and Forerunner but also a bunch of names not normally associated with tech such as Jimmy Fallon and Aziz Ansari (perhaps fans and friends of Chang’s?). Financial terms of this deal were not disclosed.
Since publishing, Uber has also sent us a statement directly confirming the deal.
“We are committed to investing in technology that helps consumers, delivery and restaurant partners alike,” said Jason Droege, Head of Uber Everything. “Ando’s insights will help our restaurant technology team as we work with our restaurant partners to grow their business.”