| SAN FRANCISCO
SAN FRANCISCO May 20 Two of the nation's
biggest online food delivery businesses said they are merging in
a deal that they hope will drive more orders, in more cities,
through their platforms.
GrubHub and Seamless, which allow consumers to easily order
online from various restaurants, are part of a group of
fast-growing businesses that standardize local services under a
national umbrella. Think restaurant reservations, where
OpenTable dominates, or car services, where privately
held startups such as Uber are making significant inroads.
"Internet sites are able to aggregate local merchants, and
we're right in the sweet spot," said Matt Maloney, GrubHub chief
executive, in a phone interview.
The services did not disclose financial terms of the deal,
which is subject to regulatory approval. It is expected to close
by August, the services' executives said.
Online takeout services allow consumers to browse hundreds
of menus online, along with reviews by fellow diners, and then
order from the service, which notifies the restaurant. The
services store payment information, cutting back on the time it
takes to order food. Restaurants like the services because they
cut back on phone calls at peak times.
Last year, GrubHub and Seamless coordinated $875 million in
takeout sales, resulting in more than $100 million in combined
revenue, they said in a statement.
But the overall U.S. takeout business is worth around $69
billion annually, with most of those sales coming from diners
picking up the phone and calling the restaurant. "Our number one
competitor is the paper menu," Maloney said.
Both companies have attracted significant backing, including
more than $84 million for Chicago-based GrubHub from investors
such as Benchmark Capital and Lightspeed Venture Partners.
New York-based Seamless's backers include private-equity
firm Spectrum Equity, which paid $50 million two years ago for a
minority stake in the business.
GrubHub is the larger of the two services, covering 20,000
restaurants in 500 cities. Maloney, its founder and chief
executive, will become CEO of the combined company, while
Seamless CEO Jonathan Zabusky will serve as president.
Seamless currently works with 12,000 restaurants in 40
cities, including in London.
The combined company will have 600 employees.
Other players in the sector include New York-based
Delivery.com and London-based Just Eat.