AUSTIN – H-E-B, an independent food retailer and the largest private employer in Texas, announced that Favor Delivery, an on-demand delivery service headquartered in Austin, will become a wholly owned subsidiary.

H-E-B is accelerating its path to become a digital retail industry leader in Texas, enabling customers to choose how they shop, pay for and receive products. The partnership also complements H-E-B’s brick-and-mortar operations by growing its online presence to meet customers’ evolving needs and expectations.

Favor will continue to operate independently as a separate brand led its 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. “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 quickly 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.

“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.”

With Favor, H-E-B gains access to its consumer-facing technology and the on-demand company’s advanced delivery system. H-E-B will also leverage Favor’s data-driven approach to capture customer insights.

This transaction is the latest in a series of strategic investments in technology and partnerships that H-E-B has forged to enhance its digital and delivery offerings in Texas. H-E-B already offers curbside pickup at over 100 stores, and HEB.com offers customers the ability to order and ship grocery, drugstore and general merchandise products to 48 states and military bases worldwide.