Seamless to top $100 million in revenue this year: CEO
SAN FRANCISCO (Reuters) - Seamless will generate more than $100 million in revenue this year as the online food ordering service expands in new cities and benefits from a surge in mobile users, Chief Executive Jonathan Zabusky said on Tuesday.
Seamless generated $85 million in revenue last year as its consumer business, its largest, grew 60 percent.
"That puts us squarely in the lead in this category, at twice the size of our nearest competitor," Zabusky said in an interview on the sidelines at the Goldman Sachs Technology and Internet Conference here.
Zabusky is scheduled to speak at the conference on Wednesday.
GrubHub, Seamless's main rival, hired banks late last year for a possible initial public offering in 2013. That company's revenue is roughly half that of Seamless, which posted about $60 million in sales in 2011..
Seamless will soon be processing $1 billion worth of food orders a year, Zabusky said. Seamless makes money by taking a small cut of the cash from these orders. The business has a high degree of operating leverage, which means each extra dollar of revenue boosts profitability, Zabusky explained.
While GrubHub may be heading for an IPO, Seamless is waiting.
"We are in a fortunate position to be profitable, with a strong balance sheet," Zabusky said. "We don't need to rely on fickle public markets to fund our growth."
Once known as mainly a New York service, Seamless saw rapid growth in other cities last year. The volume of transactions the company processed in Los Angeles more than quadrupled in 2012, while transactions in San Francisco more than tripled and more than doubled in Washington DC, according to Zabusky.
Customers are also ordering more frequently through tablets and smart phones, he added. Mobile devices account for more than 40 percent of order volume and over 30 percent of mobile order volume comes through Seamless's iPad application, he noted.
(This version of the story corrects the final paragraph to show Seamless iPad app volume is a subset of mobile orders.)
(Reporting By Alistair Barr; Editing by Bob Burgdorfer)