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.
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.
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.
The impact on Grubhub’s Chicago operations is unknown. The company did not respond to a request for comment.
It has gone through several rounds of job cuts, including a 2023 layoff of 15% of corporate staff that was believed to reduce its local headcount to about 700 workers. In 2021, Grubhub had 1,200 employees in Chicago.
Crain’s Chicago Business has reported Grubhub intends to shrink its corporate headquarters space at 111 W. Washington St. and move to the Merchandise Mart.
Wonder said acquiring Grubhub would help it make quality food more accessible.
“Bringing Wonder and Grubhub together is the next step in our vision to create the super app for meal time, re-envisioning the future of food delivery,” Lore said in a news release.
“I am incredibly excited for Grubhub to join forces with Wonder and bring more value to our diners, merchants and delivery partners,” Grubhub CEO Howard Migdal said in the news release. He said he’s confident Grubhub “will complement Wonder’s mission to make great food more accessible and that together we will create remarkable dining experiences for more customers across the country.”
The announcement did not address any changes in Grubhub management. Its unclear how Wonder’s operation, which uses mobile kitchens and physical ordering locations in concentrated markets such as New York City, will work with Grubhub’s reliance on gig workers across some 4,000 U.S. cities.
The sale frees Just Eat Takeaway to concentrate on its core markets of Britain, Ireland and Northern Europe. It exited France and New Zealand earlier this year to reduce continued losses and analysts say it may need to pare more operations.
The Amsterdam-based company reported half-year results in July, saying it lost the euro equivalent of $318 million, compared with a $272 million loss for the same period a year earlier. Its revenue was essentially flat at $2.7 billion.
Just Eat Takeaway has tried to sell Grubhub since 2022. It has cited higher food prices and competition as reasons for a decline in U.S. orders. The company also is fighting a cap on food delivery fees in New York City.
Chicago imposed a cap in 2021 during the pandemic but it has expired.
This is a developing story. Check back for updates.