Uber Technologies Inc. today said it has acquired alcohol delivery startup Drizly for $1.1 billion in stock and cash.

Founded in 2012, Drizly offers alcohol delivery in 1,400 cities across the U.S. and Canada. The company works directly with local beer, wine and spirit merchants to offer thousands of “new, local, well-known and not-so-well products.” Drizly claims to deliver alcohol in under 60 minutes and it also operates a last-minute alcohol gift service.

Coming into its acquisition, Drizly had raised $119.6 million in venture capital funding from investors that included Tiger Global Management, Avenir Growth Capital, Polaris Partners, Accomplice, First Beverage Group, Fairhaven Capital Partners and Cava Capital.

Drizly has not been without issues, however. The company suffered a data breach in July with some 2.5 million customer records finding their way onto the dark web, the corner of the internet where illicit goods are sold. The stolen data included email addresses, dates of birth, hashed passwords and in some instances delivery addresses.

For Uber, the deal makes sense in terms of adding an additional delivery service to its lineup. Uber said in a statement that the Drizly marketplace will eventually be integrated into the Uber Eats app although notably, Uber intends to maintain the existing Drizly app as a standalone offering as well. Uber is also pitching the acquisition as allowing merchants on Drizly to be able to benefit from Uber’s routing technology and consumer base.

“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,” Uber said. “That’s why we’ve been branching into new categories like groceries, prescriptions and, now, alcohol.”

Uber has shifted significantly from being solely a ride-hailing service. Partly thanks to the COVID-19 pandemic, Uber’s delivery division, which includes Uber Eats, posted a 134% revenue jump, to $8.55 billion, in its third quarter. The Uber Eats division first surpassed Uber’s ride-hailing business for revenue in the second quarter. The addition of alcohol delivery through the acquisition of Drizly can only add to that surging growth.

“We expect the transaction to drive a number of synergies for both platforms as Drizly and its merchants benefit from access to Uber’s vast consumer base and advanced routing technology,” Cowen & Co. analyst John Blackledge wrote in a note to clients today. “It is worth noting that Drizly has historically required its merchant partners to provide their own delivery personnel so access to Uber’s fleet of couriers could potentially open up the Drizly marketplace to new merchants in some markets.”

Blackledge also noted that the acquisition follows a number of others in delivery and mobility, such as Postmates and Cornershop, as well as the divestitures of ATG, Uber Elevate and Uber Eats India.

The acquisition is expected to close in the first half of 2021.

Image: Drizly