Just Eat Sells Grubhub at a Fraction of Its Purchase Price
Posted by Emma on 22nd Nov 2024
Just Eat Takeaway.com, the Dutch food delivery giant, has announced the sale of its US-based subsidiary Grubhub for an enterprise value of $650 million (£510 million). The figure represents a sharp decline from the $7.3 billion (£4.7 billion) price tag Just Eat paid to acquire Grubhub in 2021.
The deal will see Grubhub sold to New York-based Wonder Group, which marks a significant pivot for Just Eat. The acquisition of Grubhub three years ago was touted as a strategic move to create the world’s largest online food delivery company outside China. Cleared by the UK’s Competition and Markets Authority, the deal initially symbolised Just Eat’s entry into the lucrative US market during the pandemic-driven boom in food delivery services.
However, today’s announcement reflects the challenges faced by the food delivery sector amid evolving consumer habits and intensifying competition.
Just Eat Takeaway stated that the sale would strengthen its liquidity and allow the company to focus on markets with a competitive edge. Chief Executive Jitse Groen emphasised that the transaction aligns with Just Eat’s strategy to optimise its operations and accelerate growth. “This deal delivers the right home for Grubhub and its employees,” Groen remarked, extending his gratitude to Grubhub staff for their contributions.
The company also clarified that the sale would not impact its financial guidance for 2024, with the transaction expected to finalise in the first quarter of 2025, subject to regulatory approvals and customary closing conditions.
Grubhub’s new owner, Wonder Group, is an innovative food hall and delivery company founded in 2018 by Marc Lore, former CEO of Walmart. Wonder has quickly gained recognition for its mission to provide “fast fine dining” by partnering with established brands such as Alanza Pizza and Tejas Barbecue.
The company’s acquisition of Grubhub follows its purchase of meal kit provider Blue Apron in 2023 and the appointment of Tony Hoggett, a former Amazon grocery executive, as its Chief Operating Officer. Wonder’s founder, Marc Lore, described the acquisition as a step towards building a “super app for mealtime,” blending Grubhub’s restaurant partnerships with Wonder’s in-house dining and meal kit services.
The sale of Grubhub highlights the shifting dynamics within the global food delivery industry. Once buoyed by pandemic-driven demand, companies in this sector are now recalibrating strategies to navigate post-pandemic realities, including rising costs, regulatory pressures, and changing consumer preferences.
Just Eat’s divestment underscores the need for focus and financial prudence in an increasingly competitive landscape. For Wonder Group, acquiring Grubhub offers an opportunity to scale its operations and enhance its service offerings, potentially setting new standards for the future of food delivery.