SAN FRANCISCO Feb 28 GrubHub Seamless filed for
an initial public offering on Friday as the largest online food
delivery service seeks capital to extend its mobile and online
network to more cities across the country and sustain growth.
The company, created by a merger of GrubHub and Seamless
last August, processed some $1.3 billion of food orders in 2013
- still a fraction of the more than $60 billion that Americans
spend on takeout from independent restaurants every year.
The company, which is backed by T Rowe Price among other
private equity and fund investors, is aggressively expanding at
the expense of profit.
Revenue jumped 67 percent to $137.1 million in 2013, while
net profit slid to $6.75 million from $7.92 in 2012, and $15.21
million in 2011.
"Takeout enables them to grow their business without adding
seating capacity or wait staff. Advertising for takeout,
typically done through the distribution of menus to local
households or advertisements in local publications, is often
inefficient and requires upfront payment with no
certainty of success," the company argued in its filing.
However, the company warned that it was in the midst of
merging GrubHub and Seamless operations, which may affect
business. Other risk factors mentioned in its prospectus
included the risk of litigation - for instance from food-borne
illnesses - and reliance on its restaurants for everything from
service quality to timely delivery.
On Friday, GrubHub Seamless filed to raise $100 million in
an IPO, a figure decided upon for the calculation of
The company is the latest consumer dotcom name to tap public
markets in 2014. Others expected to try and go public this year
include cloud storage provider DropBox and its more
enterprise-focused rival Box.
GrubHub Seamless cited Euromonitor figures showing that
Americans spent $204 billion at some 350,000 independent
restaurants in 2012. U.S. customers spent approximately $67
billion on takeout at these independent restaurants that year,
the company said in its IPO filing.
It counted about 28,800 restaurants and 3.4 million active
users in its network as of Dec. 31, and processed 135,000 orders
daily, on average, in 2013.
The company's other backers include Benchmark Capital,
Warburg Pincus and Goldman Sachs funds. Its IPO advisers are
Citigroup, Morgan Stanley and Allen & Co.