Once Worth $7.3 Billion, Grubhub Sells For Just $650 Million (cnn.com) 27
An anonymous reader quotes a report from CNN: Europe's biggest meal delivery firm, Just Eat Takeaway, said on Wednesday it had struck a deal to sell its U.S. unit Grubhub to Wonder for $650 million, sending its shares soaring 20% in early trading. The Amsterdam-listed company had been looking to offload Chicago-based Grubhub since as early as 2022, after acquiring it in 2020 in a $7.3 billion deal amid a pandemic-driven boom in delivery services -- a process that was hampered by slowing growth, high taxes and a question of fee caps in New York City.
"Just Eat Takeaway is at last putting an end to its disastrous U.S. journey," Bryan Garnier analyst Clement Genelot said, noting the group had destroyed more than $7 billion in shareholder value there. Grubhub's enterprise value of $650 million includes $500 million of senior notes and $150 million cash, Wonder said in a statement. Wonder is a food-delivery startup led by former Walmart executive Marc Lore.
"Just Eat Takeaway is at last putting an end to its disastrous U.S. journey," Bryan Garnier analyst Clement Genelot said, noting the group had destroyed more than $7 billion in shareholder value there. Grubhub's enterprise value of $650 million includes $500 million of senior notes and $150 million cash, Wonder said in a statement. Wonder is a food-delivery startup led by former Walmart executive Marc Lore.
/me scratches head (Score:3)
Covid19 was really obviously causing bubbles all over the place.
It looks just like the stock market mania shit. The market rises massively on a bubble (that's really obvious) so a bunch of losers still decide they have to buy high, only to be fleeced almost immediately by an equally rapid fall on the other side of the bubble.
So, why did this happen? They weren't just any old small time investor. Surely they understood they were buying up an extremely overpriced company.
It just looks corrupt from the outside.
Re:/me scratches head (Score:4)
I think they all imagine we would transition to a world where everyone mostly stays home and orders a bunch of stuff and never leave the house. And then they could crank the prices up and make massive gains.
In practice, the delivery is so expensive and so unreliable that only few people do that and the delivery market crashed!
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the delivery is so expensive and so unreliable
I use InstaCart, not Grubhub, but they only messed up one of my orders in the past year (they brought me white potatoes instead of sweet potatoes).
I pay $99/year plus a $5 tip for each order. That's way less expensive than the gasoline and time I'd spend doing my own shopping.
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There was an expectation that the rise in delivery services during COVID was a catalyst for changing of consumer behaviour permanently. They weren't entirely wrong either. Lockdown periods aside we're ordering more delivery than ever. What is really strange is not so much the high purchase price of Grubhub, but the low sale price. In terms of volume, revenue, and orders placed I can't see why the value tanked quite as much as it did post COVID.
Pre-COVID Grubhub's stock price was around $60. It went up a bit
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not so much the high purchase price of Grubhub, but the low sale price.
It's a competitive business with relatively low barriers to entry and even fewer barriers to customer disloyalty, so the margins are squeezed.
So far, GrubHub has made no profit.
Grubhub not only competes with InstaCart, Shipt, etc., but also with the stores' own delivery services.
There are three grocery stores near me: Walmart, Target, and Safeway. All three offer delivery.
pizza does not have markup + delivery fee unlike t (Score:2)
pizza does not have markup + delivery fee unlike the delivery services. That markup the food + delivery fees
I'm surprised it sold for anything. (Score:5, Insightful)
I only used it during the pandemic after doordash premium freebies ran out and amazon offered a free year sub. The fees and prices were effectively the highest and they NEVER offered promotions. Meanwhile ubereats is over here spamming me every other day about 60% off orders which comes out to something like 10% less than what I would normally pay if I went and picked up the takeout myself. Even doordash offers some small promotions that mostly just eliminate all the middlemen fees for an order or two rarely.
The fees on these services are enormous and we're just talking the tech part of it - they're taking 30% from the vendor, they're charging us another 5-30%+, and then they are paying a delivery driver sub-minimum wage with the expectation that we will tip (mandatory bribe) the couriers to deliver the stuff because nobody takes an order that doesn't have a tip applied. I honestly have no idea how they think they are providing value by being leech-like middlemen to the whole process. The whole thing feels like something that could be open sourced and run by a nonprofit in terms of infrastructure, and then it would be up to stores to handle the customer service, payment and driver cost.
As a bonus, GrubHub forces you to tip before delivery, when you're placing an order. Unlike ubereats you cannot adjust the tip based on service without contacting support and having them adjust it. It's not a tip at all, but a bribe that says "please actually take my delivery order."
The bottom line to me is delivery fees on top of the inflated prices way above and beyond in-store or first party delivery, the enormous tip, the vendor fees and the frequency of mistakes or extremely long delivery times make this kind of service not worth it as a customer. If the fees were flat it would at least make some sense to do relatively large orders rarely. That's not even the case though, you're just charged way more for the same effort from all parties except for the restaurant.
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I'm not a fan of any of these services but, from a consumer point of view, Grubhub is about the same as DoorDash. They run useful promotions about the same frequency, which is a lot better than Uber Eats. Uber Eats advertises huge promotional discounts but they only apply to delivery orders and then only to SOME restaurants which they make painful to find.
For places I order from often, I make an effort to use the restaurant's preferred service. These are never Grubhub, DoorDash, or Ubereats but some more
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I only used it during the pandemic after doordash premium freebies ran out and amazon offered a free year sub. The fees and prices were effectively the highest and they NEVER offered promotions. Meanwhile ubereats is over here spamming me every other day about 60% off orders which comes out to something like 10% less than what I would normally pay if I went and picked up the takeout myself.
The race to the bottom in action. Consumers care about one thing, their wallet. Grubhub was sell sufficient and profitable while UberEats was a massive money losing enterprise funded by VC funds.
Re: I'm surprised it sold for anything. (Score:4, Insightful)
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If people only care about their wallets, why do they buy overpriced food from a restaurant and pay for overpriced delivery on top of that instead of going to a grocery store?
Agreed, I've never used food delivery because it is cheaper to pick it up myself, and restaurant food is a luxury, not a regular occurance.
Time and ability. (Score:2)
I don't drive, I order GH every day. I used to have VIP DoorDash account and they're straight up thieves. GH has been a better experience (far from perfect and stupid expensive, though, just better than DD which is a pretty low bar). I think which service is the best one is very much a local/regional thing.
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If people only care about their wallets, why do they buy overpriced food from a restaurant and pay for overpriced delivery on top of that instead of going to a grocery store?
Because that would require effort on their part. Make no mistake money is not the deciding factor in *what* you do, it's the deciding factor in *how you do it*. People gotta eat, but people don't want to get up off their asses. Now they have a choice to make: Ubereats vs Grubhub, vs Doordash. And as the OP has shown cost is the consideration.
But if you were actually a thinking person you'd also consider the time value of money. Do you pay for a nanny to look after the kids while you go shopping and then sta
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I miss Foodler, which Grubhub gobbled up, but which around here anyway, just transmitted the order and payment to the restaurant and their own deliver drivers delivered it. The premium charged was much smaller. The main reason for me to use these apps is not to have to call and try to be understood over the noise of a kitchen while talking to someone whose first language isn't necessarily Egnlish. It's especially painful when you've got a group order going and people on your side are shouting things at y
Worth (Score:1)
The word "worth" is an interesting term here...
Wonder isn't a delivery service (Score:3)
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Their site shows delivery in NY and NJ. This looks like some kind of hybrid between a Blue Apron kind of thing and them actually doing the cooking. It looks targeted at rich people, frankly.
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The Wonder trucks were all over the northern NJ suburbs a couple of years ago. They've pretty much vanished now, so I assume that was pretty much a failure. Definitely targeted at rich people.
Never (Score:5, Informative)
Grubhub was never worth 7 billion. Some dipshit beyond insanity PAID that at one point...but thats because he was once-in-a-lifetime stupid. Equally with the once-in-a-lifetime amazing value that such a service existed the moment people couldn't leave their own houses.
Intersection of VC hype, pandemic and demographics (Score:3)
Take your combination of factors for these formerly high valuation businesses
- Near zero interest rate loans (MMT for businesses)
- Pandemic dramatically shifting consumer spending habits
- Demographics - Largest generation, millennials, in their high consumption 20s a few years ago with freedom and inclination to try new things
- VC needing to find the next big thing to fund, hype and then pawn off on other investors
Now
- US has lost tens of thousands of restaurants since the pandemic. Oddly, maybe a demograp
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Correlation (Score:2)
Should've taken Google's buyout (Score:2)
deal.