After first indicating in January it planned to spin off Postmates X, the robotics division of on-demand food delivery firm Postmates, Uber Technologies (NYSE: UBER) has made it official, according to published reports.
Bloomberg first reported that Uber would co-lead a $50 million investment in the new company, Serve Robotics, which will be based in San Francisco. Venture firm Neo will also be involved, the publication reported.
Serve Robotics is part of Postmates, which Uber acquired last year in a $2.65 billion deal that closed in December. The combination brought together Uber’s marketplace and access to drivers, and Postmates’ expertise in on-demand food delivery.
In the Q4 2020 earnings call on Feb. 10, CEO Dara Khosrowshahi said Uber has “increased confidence in our ability to reach breakeven this year while continuing to invest in long-term initiatives close to our core.” Part of that plan includes continued investment in delivery and Uber Eats.
“Looking ahead, our strategic priority in 2021 is to continue to harness the power that our platform … and growing product offerings can uniquely provide. Wherever you need to go, whatever you need to get, Uber can help,” he said. “We believe our highly engaged consumer base on delivery will drive stronger mobility growth as cities reopen. On the flip side, we expect Mobility to become an increasingly powerful acquisition channel for our Delivery business.”
Spinning off Serve Robotics is likely part of a broader plan to refocus on its core. Last summer, Uber was reportedly looking for about $500 million in investment for its Uber Freight division. In May, the company said it was “re-evaluating” its noncore segments, like Uber Freight and autonomous driving. Uber has been shedding employees, cutting costs and rolling back its capital commitments in efforts to preserve liquidity amid the pandemic, which has dented its core ride-sharing business.
Uber sold its self-driving car business to Aurora Innovation in December, taking a 20% stake in the company with a $400 million investment. The Serve Robotics spinoff would seem to be in the same vein.
The all-electric Serve robots have a 50-pound capacity and can travel 30 miles on a single charge. Serve robots use lidar and advanced sensors to create a virtual picture of their surroundings in real time for navigation. They feature an interactive touchscreen for communication with customers.
Requests for comment to Serve Robotics had not been returned at publication time.