Just Eat Takeaway, the Netherlands-based food delivery giant, announced on Wednesday that it is selling Grubhub to New York's Wonder Group in a deal valued at $650 million marking a significant drop from the $7.3 billion Just Eat paid for Grubhub just four years ago.
The deal is expected to be finalised by early 2025, with Just Eat Takeaway netting around $50 million. Wonder Group, which started as a food delivery service in 2018, has shifted gears and now operates delivery-focused restaurants in New York and Philadelphia. They will also take on $500 million of Grubhub's debt.
Just Eat Takeaway’s move comes amid mounting financial challenges in the food delivery sector, which saw rapid growth during the pandemic but has since struggled with profitability as customer habits shifted back to in-person dining.
The food delivery market also faced intense competition in recent years. Venture capitalists poured millions into startups like Getir and Flink, which aggressively expanded with marketing and acquisitions. This fierce competition further squeezed profitability for companies like Just Eat Takeaway.
The initial pandemic boom for instant delivery services fizzled out as the world returned to normalcy. Once-hyped startups like Flink, valued at nearly $3 billion at its peak, have seen their valuations plummet to under $1 billion. Getir, another major player, has even retreated from the US, UK, and Europe, focusing solely on its home market of Turkey.
Just Eat Takeaway has sought to sell Grubhub for years, first announcing plans to offload the U.S. subsidiary in April 2022 as part of a pivot towards profitability. Yet, the sale proved challenging, with Just Eat’s CEO, Jitse Groen, describing the process as “very difficult” last year. Now, Groen says the sale of Grubhub to Wonder Group will enhance Just Eat Takeaway’s cash flow and enable the company to reinvest in markets where it has a competitive edge.
Wonder Group CEO Marc Lore envisions the acquisition as the next step toward creating a super app for food delivery. “We’re excited to offer a curated selection of Grubhub’s restaurant partners directly in the Wonder app, alongside our own restaurant brands and meal kits,” Lore said. “Bringing Wonder and Grubhub together re-envisions the future of food delivery.”
Wonder boasts over $1.7 billion in funding from prominent investors like Accel, Bain Capital Ventures, Google Ventures, Nestle, and Forerunner Ventures. Whether their super app vision will materialize, however, remains to be seen
