Two titans of online food ordering agreed to merge Monday. Chicago-based Grubhub and New York-centric Seamless agreed to join forces, creating an as-yet-unnamed entity aimed at signing up more restaurants and driving sales higher.
There are any number of reasons to do a merger now. It gives the company a bigger footprint that might make for a more successful public offering somewhere down the line. And merging while the industry is still young might make it easier to regulatory approval than later on, when online ordering may be a bigger part of consumer spending and more likely to raise the hackles of regulators.
That aside, there are synergies. Grubhub might be interested in Seamless’ strength in the corporate catering business. And Grubhub has some technologies that Seamless might find attractive, such as its Order Hub platform. Presumably the companies are going to be spending less money trying to poach customers from one another. And there are probably some efficiencies to be had.
At any rate, here are the takeaways on the two companies and the deal, the terms of which weren’t revealed. Regulators still have to approve it.
- Seamless: 1999
- Grubhub: 2004
- Seamless: New York
- Grubhub: Chicago
- Seamless: Reportedly had $85 million in revenue in 2012.
- Grubhub: Estimated to be on track to pass $100 million in revenue this year.
- Seamless: Online ordering available at more than 12,000 restaurants in 40 cities the US and UK
- Grubhub: Online ordering available at over 20,000 in about 500 cities
- Seamless: Major US cities, especially New York with a pronounced strength in corporate catering.
- Grubhub: Strongest foothold traditionally in the midwest and consumers
- Seamless: Was purchased by food giant Aramark in 2006. Aramark spun off Seamless in 2012 to shareholders including Spectrum Equity Investors who reportedly spent about $50 million.
- Grubhub: Raised some $84 million in venture funding including a $50 million round in 2011 from Lightspeed Venture Partners .
- Seamless: Bought Menupages in 2011 for a reported $15 million.
- Grubhub: Bought Dotmenu in 2011, using some of that $50 million infusion.
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