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H-E-B acquires on-demand delivery startup Favor

San Antonio-based grocery store chain H-E-B, is buying Austin-based on-demand delivery startup Favor Delivery, the company announced today.

Favor Delivery will become a wholly owned subsidiary of H-E-B. The terms of the transaction were not disclosed.

Favor will continue to operate independently as a separate brand led by CEO and president, Jag Bath. H-E-B will retain all of Favor’s employees and its 50,000 Runners, who operate as contract delivery drivers.

“I am thrilled to have H-E-B join forces with another well-respected and innovative Texas company,” said Martin Otto, H-E-B’s chief operating officer. “We share similar values, including a commitment to excellence in customer service and to our greatest resource – our people. Over the past two years, we have established a strong working relationship with Favor that has proven to be immensely successful for both companies. We see a unique opportunity with this partnership to support and accelerate each other’s growth through the sharing of experience, insight and resources.”

Founded in 2013, Favor has expanded its presence to 50 cities across the state of Texas. In 2017, Favor more than doubled its footprint across the state and became the first U.S. on-demand delivery company to achieve profitability at scale, according to a news release announcing the acquisition.

“We could not be more excited to be part of H-E-B,” said Bath. “I am incredibly proud of our team’s success and the business we have built at Favor. H-E-B’s extensive resources, capital and retail food industry experience will enable us to further build on our momentum and significantly accelerate our growth throughout Texas.”

H-E-B also owns the Central Market chain and it just announced it was offering a curbside pickup service at its Fort Worth location that will eventually spread to other Texas locations.

H-E-B, with sales of $25 billion, operates 400 stores in Texas and Mexico.

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