Grubhub sold for $650M. Four years ago it was worth $7.3B

https://www.cnn.com/2024/11/13/investing/grubhub-sale-wonder/index.html

by FridayoLeary • 2 years ago

37 23 2 years ago

A couple things happened: delivery services were unusually popular due to lockdowns, and that ended. Couple that with the drying up of investments in 2021ish that caused shrinking valuations for everyone. And you get this transaction which itself includes a premium.

diogenescynic• 2 years ago

I bet these services get a lot of new users and then when the service is terrible and doesn't meet expectations they never go back. I tried them all once or twice then never again when it would regularly take 2+ hours for my food to get delivered. Never had a single good experience with a food delivery app. They actually seem to have regressed all food delivery which before this usually was managed by the restaurant with its own delivery drivers. Now no restaurants really deliver so now we're all forced to use these apps. It sucks!

Larrikin• 2 years ago

Grubhub as a database was an amazing service in college. In cities, there was a large number of nearby restaurants you may never have even heard of and you finally could see the full collection instead of just defaulting to Pizza Hut. Delivery was limited to however far away the restaurant was willing to lose one of their own employees for a bit, it was free or nearly free, and a shitty delivery driver was bad for business.

This is now a new hell. We have floating drivers, picking up multiple food orders from multiple restaurants and driving in the wrong direction while your food gets cold.

We have ghost kitchen restaurants having multiple online store fronts to hide the bad reviews of their crap food for the actual restaurant.

We have small businesses and large corporations demanding 15 to 20 percent of the order cost to deliver the food a few blocks. But they'll lower it to 10 percent if you get a subscription. And they still want a tip.

Even the existing aggregators like Yelp won't actually show you what's around without paging through tiny slices of their information ranked almost arbitrarily by random people on the Internet and gamed by businesses paying to rank higher.

I just don't bother with delivery. I get subscriptions to nearly all the food services included with my credit cards, banks, or some other random service and it's still not worth it. Either I'm eating out at a restaurant, where I'll begrudgingly tip, or I'm picking up food from somewhere I can get to within a ten minute walk or drive. Grubhub, Door Dash, and the like provide no value anymore. The massive loss in value of GrubHub still was not enough.

blackeyeblitzar2• 2 years ago

Same. The ghost kitchens and also exorbitant costs (particularly due to city imposed costs here) made me abandon all delivery services. I now prefer picking things up and enjoy the time driving to the restaurant with music or a podcast. It’s also nice to interact with other humans. I save lots of money and get something out of it.

FooBarBizBazz• 2 years ago

Exactly. Who wants to sit in their apartment/house? Among rotting cartons? No! Go out into the world! Enjoy the city! Now you have a reason to visit that neighborhood you've never been to. Take a little walk to get there: Enjoy your time and your health! I will understand if you're at the office working late. Otherwise? He who is tired enough to use a delivery service is tired of life.

superultra• 2 years ago

Everytime I order Grubhub/etc - which is like you decreasing quick to never again - I miss Foursquare. Foursquare did exactly what you’re talking about in terms of surfacing new places. But it was friends who were doing the surfacing.

ashwindharne• 2 years ago

Not sure how active it is outside large US cities but I've been using Beli (https://beliapp.com/) for the past couple years. It's essentially friends stack-ranking restaurants they've been to, which is useful because I can adjust for their biases -- they care varying amounts about service, cleanliness, authenticity, creativity, ambiance, etc. I regularly find new spots through friends and can decide if I trust their taste enough to order/check it out in person.

Only downside is it's pretty limited to the yuppie-foodie crowd - like in NYC, once you venture into deeper Brooklyn/Queens/The Bronx, you won't find much on there.

jen20• 2 years ago

I still use Foursquare for this, especially while travelling.

onetokeoverthe• 2 years ago

I'll begrudgingly tip

THANKS!

Multi-billion valuation? Even suckers know it wasn't really worth that much. A Wall Street London Hong Kong casino game.

SOLAR_FIELDS• 2 years ago

Now I’m kind of curious after reading your comment - did anyone mostly correctly predict this dystopia 5-10 years ago? It seems somewhat obvious enough that maybe at least one person nailed it

leoedin• 2 years ago

If I order from my local pizza restaurant for collection it ends up being about 50% of the cost of any food delivery app. I quite enjoy the walk too.

Apofis• 2 years ago

I used to be able to order Chinese Food or Pizza and pay a $2 tip on top of the order and everyone was happy. Ordering food has changed for the worse in innumerous ways.

hugoromano• 2 years ago

Market cap is just speculative pricing, the grand illusion of wealth. Then, there is investment banking advice, which is still speculative. The real value is only confirmed when a transaction occurs.

aeternum2• 2 years ago

real value is only confirmed when a transaction occurs

Market cap is based on the last transaction that occurred. Are you saying it's speculative until the entire company is purchased?

satvikpendem• 2 years ago

Or until it IPOs. I can make a company be "worth" one trillion dollars if I sell one trillionth of my shares for one dollar.

s1artibartfast• 2 years ago

yes. It is only the opinion of the last buyer and for part of the company. It may or may not translate to a total price.

Ill offer you $1 for 0.000,001 stake in your HN account. That doesnt mean someone else will buy the whole thing for $1M. Valuations in general are moving estimates.

mu53• 2 years ago

I think the real scheme behind these companies was to monopolize the restaurant industry the way that uber has monopolized the taxi industry.

7.3B makes sense if you hold 40% of the restaurant business across the US.

Build out delivery network for existing restaurants, capture all of their order data, use that data to create ghost kitchens to sap business, ghost kitchens can turn into full restaurants, and continue as far as you could.

voxic11• 2 years ago

The 7.3 billion dollars figure doesn't come from market cap. It was the price that Just Eat actually paid to purchase the entirety of GrubHub 4 years ago. So it wasn't speculative, someone actually paid it in full.

ChrisArchitect• 2 years ago

[dupe]

More discussion: https://news.ycombinator.com/item?id=42128935

https://news.ycombinator.com/item?id=42127304

ChrisRR• 2 years ago

Hmmmmm what possible links could there be between 2020 and food delivery services? It's impossible to tell

josephd79• 2 years ago

The fact this industry tricked us into spending 200% more just to have a combo meal delivered delivered is insane and people have caught on. I've only ever used the app when someone gave me a gift card. I like local places anyways.

jfengel• 2 years ago

I've never understood the value proposition here. Of course they have to charge 200% to deliver you a combo meal. Getting a taxi from the restaurant to your place would cost at least as much. Driver time, gas, insurance, vehicle depreciation, time spent getting to the restaurant... it's got to add up to several dollars at least even if they carried no food at all.

It should cost about the same to deliver $200 worth of filet mignon with truffles. Same amount, much smaller percentage. I'm surprised people ever order small amounts of food through those services.

Grubhub sold for $650M. Four years ago it was worth $7.3B

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