- M&A
- November 14, 2024
- 4 minutes read
Marc Lore’s Wonder Buys Grubhub In $650M Deal
Wonder, a food delivery startup led by serial entrepreneur Marc Lore, has struck a deal to acquire Grubhub, a popular…
Wonder, a food delivery startup led by serial entrepreneur Marc Lore, has struck a deal to acquire Grubhub, a popular U.S. food delivery app.
- Grubhub, owned by Amsterdam-based Just Eat Takeaway (AMS: TKWY), controls 8% of the U.S. food delivery market, according to Statista.
Wonder will pay $150mn in cash and assume $500mn of Grubhub’s debt, totaling $650mn. The sale represents a steep loss for Just Eat Takeaway, which paid $7.3bn to acquire Grubhub in 2021.
Food delivery apps boomed in the early days of the Covid pandemic, spurring lofty valuations on the public markets. The food delivery market has since cooled, and high interest rates plus other macroeconomic factors have dampened these valuations.
In 2021, Just Eat Takeaway’s market value peaked at nearly $20bn, which helped it acquire Grubhub in a $7.3bn all-stock deal. The Dutch company used its valuable shares to buy a leading U.S. food delivery app and expand its business.
However, tough competition from Doordash and Uber Eats, the two biggest U.S. food delivery apps, made Just Eat Takeaway’s foray into the U.S. market hectic. Grubhub incurred substantial losses, causing its Dutch owner to put it up for sale. The acquirer is Wonder, a food delivery startup launched by Marc Lore in 2018.
- Lore is an e-commerce industry veteran who sold his first startup, Quidsi, to Amazon for $545mn and the second, Jet.com, to Walmart for $3.3bn. He led Walmart’s e-commerce operations for five years, transforming the brick-and-mortar retail giant into a formidable Amazon competitor.
Wonder has received $1.5bn in venture funding from notable investors, including Accel, Bain Capital, and Dragoneer. Alongside its Grubhub acquisition, Wonder announced $250mn in new funding, making it one of the best-funded food delivery startups. What’s uncertain is if Wonder leverages its massive capital to become a dominant force in a highly competitive industry.
In October 2023, Wonder struck a $130mn deal to acquire Blue Apron, a struggling meal delivery company. The New York-based startup is keen on acquisitions to expand in a tough market dominated by Doordash and Uber Eats.
