June 11, 2020
Image: Amazon, Sharon McCutcheon via Unsplash
Good morning! This Thursday, what Amazon wants from lending, understanding Just Eat Takeaway.com's Grubhub acquisition, and the stressful world of pandemic ecommerce. Want Index in your inbox each morning? Subscribe here.
As of 4:50 a.m. PDT: Nasdaq Futures: -1.52% | Euro 600: -2.53% | Nikkei: -2.82% | Hang Seng: -2.27%
A few years ago, there was a lot of talk about how Amazon Lending — which offers loans to Amazon sellers — spelled the end for traditional Wall Street banks. That … hasn't quite transpired.
Amazon took a circuitous route to getting here. When it first launched Lending in 2011, it used its own balance sheet. But it seemed to realize quickly just how tricky running a bank actually is.
It now seems that it has understood — and has decided the risks aren't worth the rewards. After mulling a loan marketplace, it's decided to partner directly with Goldman Sachs.
Seen in that light, lending starts to look a lot like Prime Video or Alexa. It's not something for Amazon to make money from directly, but it's something that can fuel retail growth. Understood in that light, the Goldman partnership — which will let Amazon offer way more loans, with way less risk, than it otherwise would — makes a lot of sense.
Turns out the hottest deal in tech isn't happening: Uber isn't buying Grubhub after all. Instead, European behemoth Just Eat Takeaway.com (which we'll call JET) is gobbling it up for $7.3 billion.
And so here we are. Months after Just Eat and Takeaway.com combined in a $7.4 billion deal, the new entity is getting even bigger.
JET said yesterday that it plans to continue that hybrid model in the U.S. And with both JET and Grubhub having such similar models, there are presumably big savings by combining back-end technology.
Remember that period in March where it was impossible to buy anything online? Turns out that was really awful for ecommerce platforms, too. The Wall Street Journal has a great article about Thrive Market, which saw delivery times soaring as demand outstripped the company's wildest expectations. "It was excruciating," CEO Nick Green said.
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