The Business Model: Grub extract’s a commission rate from both sides of their network when they enable a takeout/delivery order. With >5MM monthly active diners and >30,000 restaurants, GrubHub has built a vibrant two-sided marketplace within a domestic takeout industry processing $67bn of transactions annually.1įor context, GrubHub went public in April 2014 and is currently a $2bn market cap company at a revenue run-rate of $340MM/yr, growing 30%+ per year, with 20% operating margins. In the first quarter of this year, Grubhub’s revenue rose 12% to $363 million, but it reported a net loss of $33.4 million.GrubHub provides an online/mobile platform for restaurant pick-up and delivery orders. The company reported a net loss of $18.6 million in 2019. Grubhub is the leader in key markets like New York, Boston and Chicago.ĭespite winning new customers, Grubhub struggled to remain profitable as competition heated up. That’s less than the 37% controlled by DoorDash, but more than Uber Eats’ 20% share. food delivery market, according to Second Measure, a data analysis company. Just Eat provides deliveries in Europe, Australia, Israel, New Zealand, Canada, Mexico and Brazil. Grubhub’s orders grew 28% over the prior year in April and May, while Just Eat ’s orders grew 41%. The coronavirus pandemic has boosted sales for both Just Eat and Grubhub, with restaurants shuttered, more people staying home and ordering takeout food. Grubhub has 23 million active users and reported revenue of $1.3 billion. Combined, those companies have 48 million active users and reported revenue of $1.7 billion in 2019. In January, bought its British rival Just Eat for $7.8 billion. Grubhub acquired Seamless in 2013, while DoorDash bought the upscale service Caviar last year. Aggressive discounting and heavy marketing costs to win new users have also taken a toll on profits, and restaurants have been pushing for lower fees.Īs a result, consolidation has been a constant in the industry. But they’ve been joined by a host of others, including Uber Eats, DoorDash, Deliveroo and Postmates.Ĭustomers jump freely between the services, which makes it difficult to deliver stable sales. and Grubhub, both founded in the early 2000s, were some of the earliest entries in the sector. ![]() The merger will let the companies share technology and marketing costs and provide the broadest range of services to restaurants and consumers, the companies said. Matt Maloney, Grubhub’s founder and CEO, will join Just Eat ’s board and will lead the company’s North American business, the companies said. That doesn’t mean we are interested in doing any deal, at any price, with any player,” Uber said in a statement. “Like ridesharing, the food delivery industry will need consolidation in order to reach its full potential for consumers and restaurants. ![]() food delivery business, but could have run into snags with regulators. If Uber had succeeded in buying Grubhub, it would have given the companies control over a majority of the U.S. Grubhub shares closed at $59.05 Wednesday. Grubhub shareholders will receive depository receipts representing a portion of shares in the new company. ![]() Just Eat said it will acquire 100% of Grubhub’s shares at an implied value of $75.15 per share. Combined, they will be the largest restaurant delivery company outside China. Just Eat and Grubhub processed 593 million restaurant orders in 2019 and have about 70 million users worldwide. The combined company will be headquartered in Amsterdam, with its U.S. The deal is expected to close in the first quarter of 2021.
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