SAN ANTONIO – Independent grocer H-E-B announced the acquisition of Favor Delivery, an on-demand delivery service based in Austin, Texas.

Terms of the transaction were not disclosed however, Favor Delivery will become a wholly owned subsidiary of H-E-B. Favor will continue to operate independently as a separate brand led by Jag Bath, CEO and president of the delivery service. H-E-B also said all of Favor’s employees will continue to work for the company, including 50,000 contract delivery drivers called “Runners.”

“I am thrilled to have H-E-B join forces with another well-respected and innovative Texas company,” said Martin Otto, COO of H-E-B. “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.”

H-E-B said partnering with Favor accelerates the grocer’s growth into the digital retail space while complementing H-E-B’s brick-and-mortar business. H-E-B also gains Favor Delivery’s consumer-facing technology and advanced delivery system. The grocer intends to leverage Favor’s data to capture consumer insights that will enhance the customer experience.

Favor Delivery was founded in 2013 and operates in 50 cities across Texas. In 2017, Favor more than doubled its footprint across the state and became the first US on-demand delivery company to achieve profitability at scale.

“We could not be more excited to be part of H-E-B,” Bath said. “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.”