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Why did Postmates hire Silicon Valley’s most famous bankers only to raise cash from its existing investors?

Huh? Huh.

A Postmates delivery person
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Back in March, Recode reported that delivery startup Postmates had hired Qatalyst, the famed Silicon Valley investment bank known for helping internet companies find acquirers. But six months later, Postmates still hasn’t been sold.

Instead, Postmates will likely raise an investment of at least $100 million, TechCrunch first reported and Recode has confirmed.

That result, on the face of it, isn’t a complete shock because Qatalyst does occasionally help companies raise money instead of sell. And it’s not unusual for bankers to do both at the same time — look for buyers as well as investors. It’s called a dual track process.

What is weird, however, is where Postmates’ new money is coming from: Its existing investors, led by Peter Thiel’s Founders Fund, instead of a new investor Qatalyst was hired to find (if it was going to be an investment and not a sale).

Huh? Let’s back up and replay this sequence of events to see if we can find the logic.

First, Postmates hires Qatalyst to help it explore selling the company or raising money from new investors. Qatalyst bankers go out and talk to a bunch of would-be acquirers and would-be investors but don’t find a deal. So Postmates’ current investors decide to pony up a bunch of new money instead because, really, what is the alternative when you’re backing a fast-growing but money-losing company that you think may still have home-run potential?

This means one of the following scenarios is true. Either A) Postmates thinks its business is more attractive than would-be acquirers or new investors do, or B) Qatalyst didn’t do its job well, or C) both of the above.

None of the parties involved returned my messages. So I’m going with C.

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