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Postmates, the San Francisco startup best known for food delivery, has hired the investment bank founded by famed Silicon Valley dealmaker Frank Quattrone to advise it on fund-raising efforts or a possible sale, according to three people familiar with the arrangement.
The investment bank, Qatalyst Partners, has approached several larger companies to gauge their interest in Postmates. It is not clear which specific companies were pitched or whether the bankers pitched these companies on buying Postmates or investing in the startup, or both. It is not uncommon for bankers to assess both options.
Larger companies with restaurant-delivery operations include GrubHub, Amazon and Uber. Google also has a same-day delivery business, but not one focused on prepared meals.
Postmates and Qatalyst representatives did not respond to requests for comment.
Postmates’ hire of Qatalyst comes at a time when investors’ willingness to give rich valuations to fast-growing, unprofitable businesses is decreasing. Postmates is said to be growing quickly, but is not making money. The startup was most recently valued at around $400 million when it raised $80 million in June.
CEO Bastian Lehmann told Forbes in November that he would seek to raise money for his startup as early as January. At the time, he said Postmates would generate revenue of $60 million in 2015.
The company operates a network of couriers in major American cities who deliver goods from local restaurants and stores to customers within an hour. Customers place orders through the Postmates app and can track their delivery in real time. The company generates revenue through delivery fees and services fees, and also takes a cut of some transactions. It has official partnerships with Chipotle, Starbucks and Apple, but its couriers also deliver from businesses with which it doesn’t have a business relationship.
DoorDash, a competitor that focuses on restaurant delivery, is in the process of raising an investment of more than $100 million, according to a source. The Wall Street Journal reported the deal would give DoorDash a valuation, not counting the new funds, of $600 million. That would mark the same valuation as its last round.
The largest company in the space is GrubHub, a public company that works with tens of thousands of restaurants around the country. Its stock price has plummeted 44 percent in the last year, and increased competition hasn’t helped. Amazon now offers a restaurant-delivery service to Prime members in seven cities, and Uber offers a similar service in 11 U.S. cities.
This article originally appeared on Recode.net.
