Grubhub Sold for $650M to Wonder, A New York-Based Food Delivery Startup
New Owner Eyes Expansion and Diversification
We break down complex business news to help you understand how money moves in Chicago and how it affects you.
Grubhub is being sold for a fraction of its value compared with a 2021 deal, when Just Eat Takeaway.com gobbled up the Chicago-based company in pursuit of a transatlantic empire in food delivery. Wonder, a New York-based food delivery startup, said Wednesday it will acquire Grubhub for $650 million, including $500 million in senior notes and the rest in cash. The value is a far cry from the $7.3 billion Just Eat Takeaway paid for Grubhub.
Competitive Market and Pandemic’s End Contribute to Lowered Value
Since then, Grubhub’s business has been hammered by competition from the likes of Uber Eats and DoorDash, and by restaurants taking over deliveries themselves to avoid sharing fees. The end of the pandemic also lowered demand for ordering from home.
New Funding and Operations
Wonder said it expects the sale to close early in 2025, subject to regulatory approvals. The company, which operates in the northeastern United States, also said it has a new infusion of $250 million from investors. Founded by former Walmart executive Marc Lore, Wonder touts itself as a “new kind of food hall” that allows customers to get dishes from top restaurants and celebrity chefs in a single order delivered in about 30 minutes.
Potential Changes for Chicago Operations
The impact on Grubhub’s Chicago operations is unknown. Company spokesman Najy Kamal declined to comment on potential changes but said Grubhub has 750 employees in Chicago and 2,200 nationwide. It has gone through several rounds of job cuts, including a 2023 layoff of 15% of its corporate staff. In 2021, Grubhub had 1,200 employees in Chicago.
Grubhub HQ to Relocate
Kamal said Grubhub will move its headquarters to the Merchandise Mart from 111 W. Washington St. next month. Crain’s Chicago Business has reported Grubhub intends to shrink its corporate headquarters space.
Conclusion
The sale of Grubhub to Wonder marks a significant change for the company, which has struggled in recent years to compete in a crowded market. With new funding and operations, Wonder plans to expand and diversify its offerings, potentially changing the face of food delivery in the United States. The impact on Grubhub’s Chicago operations remains to be seen, but one thing is certain – the company is undergoing a significant transformation.
FAQs
Q: Why is Grubhub being sold?
A: Grubhub is being sold due to its struggled performance in the competitive food delivery market. The company has faced challenges from Uber Eats, DoorDash, and others, and has also had to adapt to changes in consumer behavior following the end of the pandemic.
Q: Who is buying Grubhub?
A: Wonder, a New York-based food delivery startup, is buying Grubhub. Wonder is backed by new funding and has a track record of successful operations in the northeastern United States.
Q: What does the sale mean for Grubhub employees?
A: The impact on Grubhub employees is currently unknown. Company spokesman Najy Kamal declined to comment on potential changes, but the company has previously gone through several rounds of job cuts.
