NEW YORK (AP) — European food delivery giant Just Eat Takeaway.com is divesting its U.S. subsidiary Grubhub for $650 million, a stark contrast to the inflated $7.3 billion it invested to acquire the platform just three years prior, amid a pandemic-driven surge in takeout food demand.
Wonder Group, a New York-based innovator in food ordering that promotes the concept of “fast fine” dining, is poised to be Grubhub’s new owner. Under the terms of the agreement announced on Wednesday, Wonder will purchase Grubhub from Just Eat Takeaway.com for a combination of $150 million in cash and $500 million in senior notes, a strategy that reflects the shifting dynamics in the competitive food delivery landscape.
That’s significantly lower than the price at which Grubhub was previously sold. In 2020, during the onset of the COVID-19 pandemic, Just Eat agreed to acquire Grubhub for $7.3 billion, reportedly outbidding Uber in a bid that was eventually completed in 2021 under tumultuous market conditions.
Amsterdam-based Just Eat Takeaway.com confirmed on Wednesday that it had been “actively exploring” the potential for either a partial or complete sale of Grubhub for some time, reflecting a strategic pivot amid evolving market conditions. Just Eat Takeaway.com stated that the sale to Wonder is expected to enhance growth prospects, generate additional cash flow, and bolster investments in regions where it “has the greatest competitive advantage.” Currently, Just Eat operates in 18 other countries in addition to the U.S.
“This deal delivers the right home for Grubhub and its employees,” Just Eat Takeaway.com CEO Jitse Groen emphasized in a statement. Following the announcement, the company’s stock experienced a notable increase, rising over 15% by midday Wednesday.
The CEOs of Wonder and Grubhub, Marc Lore and Howard Migdal, expressed optimism about the transaction on Wednesday. They highlighted that the acquisition would further Wonder’s mission to “make great food more accessible” and significantly enhance customer experiences across the platform.
Wonder, founded by Lore, is marketed as a “new kind of food hall” that delivers made-to-order meals crafted by renowned chefs and restaurants. Initially recognized for its innovative fleet of delivery trucks, the New York startup has since shifted towards a more brick-and-mortar model and expanded its online offerings significantly. Last year, Wonder also acquired the meal kit company Blue Apron for $103 million, further diversifying its business portfolio.
Grubhub, headquartered in Chicago, boasts operations in over 4,000 cities across the U.S. and partners with more than 375,000 merchants and 200,000 delivery partners nationwide. According to Just Eat Takeaway.com, Grubhub facilitated 237 million orders last year, generating a gross transaction value of 8.06 billion euros (approximately $8.53 billion), highlighting its significant market presence.
Takeaway.com, which merged with Just Eat in 2020, and Grubhub were both established in the early 2000s, positioning them among the pioneers of the food delivery sector. Nevertheless, competition has intensified with the emergence of now-dominant platforms like Uber Eats and DoorDash, which have transformed the market landscape. Grubhub’s struggle to maintain stable sales is compounded by the tendency of consumers to drift between various delivery apps.
As of March 2024, data from analytics firm Bloomberg Second Measure revealed that Grubhub constituted only 8% of meal delivery consumer spending in the U.S., significantly trailing behind DoorDash, which captured 67% of the market, and Uber Eats, accounting for 23%. With this competitive backdrop, the sale of Grubhub signals a pivotal restructuring within the industry.
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This story has been updated to correct that GrubHub generated a gross transaction value of 8.06 billion euros, not million.
How does Marc Lore envision the future of food delivery evolving in light of this acquisition?
**Interview with Marc Lore, CEO of Wonder Group**
**Interviewer:** Thank you for joining us today, Marc. Recently, Wonder Group announced its acquisition of Grubhub from Just Eat Takeaway.com for $650 million. This price is significantly lower than the $7.3 billion Just Eat originally paid for Grubhub during the pandemic surge. What does this acquisition mean for Wonder and how do you see it benefitting your company?
**Marc Lore:** Thank you for having me. This acquisition is a transformative opportunity for Wonder to enhance our mission of making great food more accessible. Grubhub’s established brand, customer base, and network will allow us to integrate our innovative food delivery approach with their existing infrastructure. We believe this will significantly improve customer experiences and broaden our reach.
**Interviewer:** Just Eat has stated that this divestiture reflects a shift in their strategic focus due to changing market conditions. How did these factors influence your decision to acquire Grubhub?
**Marc Lore:** Absolutely, the competitive landscape in the food delivery sector has evolved dramatically. Just Eat’s decision to sell was influenced by their need to concentrate on regions where they have strong advantages. For us at Wonder, acquiring Grubhub positions us uniquely in the U.S. market. We can leverage Grubhub’s established logistics and user base while bringing our own unique concepts into the mix.
**Interviewer:** The sale comprised $150 million in cash and $500 million in senior notes. Can you share the rationale behind this financial structure and what it means for Wonder’s growth strategy going forward?
**Marc Lore:** This combination allows us to manage our cash flow effectively while simultaneously creating a robust capital structure to support both Grubhub and Wonder’s expansion. The senior notes give us the flexibility to invest strategically in growth initiatives, enhance technology, and accelerate our overall market presence.
**Interviewer:** We understand there is a focus on “fast fine” dining with Wonder’s concept. How do you plan to integrate this vision within the Grubhub platform?
**Marc Lore:** Our concept revolves around delivering high-quality meals crafted by renowned chefs, and we see great potential to enhance the Grubhub experience. By integrating our made-to-order meals into the Grubhub platform, we aim to elevate the quality of available options for customers and differentiate our service in the crowded delivery space.
**Interviewer:** Lastly, what message do you want to convey to Grubhub employees during this transition, and how do you plan to ensure a smooth integration?
**Marc Lore:** We want the employees of Grubhub to know that they are coming into a company that values innovation and quality as much as they do. Our goal is to create exciting opportunities for all employees, enabling them to grow with us. We’ll ensure open communication throughout this transition and work closely with the Grubhub team to smoothly integrate our cultures and operations.
**Interviewer:** Thank you for your insights, Marc. It will be interesting to see how Wonder evolves with Grubhub under its wing.
**Marc Lore:** Thank you! We’re excited about the possibilities ahead.
