Yelp Sells Eat24 to GrubHub, Bolstering Food Delivery Monopoly

Another day, another big merger in the food sphere: Yelp is selling its food delivery arm, Eat24, to rival delivery service GrubHub for a cool $287.5 million — roughly twice what Yelp paid for it just two years ago, The Verge reports.

The acquisition cements “Grubhub’s position as the largest online takeout and delivery platform in the U.S. at a time when venture capitalists have put billions of dollars behind competing startups in the food delivery business,” Quartz notes. Since being founded back in 1999, Grubhub has swallowed up various delivery services and other related businesses including Seamless, DiningIn, and MenuPages. It now controls a whopping 23 percent of the digital food delivery market — a figure that’s rivaled only by Domino’s, which controls 24 percent.

Getting into the food delivery space might have created more challenges than Yelp originally bargained for: In 2015 it was sued for $5 million by a group of Eat24 delivery drivers who claimed their tips were being withheld, and it has also faced tough competition from UberEats, which has been able to capitalize on Uber’s massive existing customer base. Nonetheless, doubling its money on Eat24 in just two years is clearly a huge victory.

Yelp users have been able to order food without leaving the app for years now, thanks in part to the Eat24 acquisition, and the sale doesn’t mean Yelp users will lose that ability: Yelp has agreed to integrate GrubHub's ordering platform into its app for at least the next five years.

Does this move mean Yelp is looking to simplify its business? It still has a hand in reservations — for now, anyway: In 2013, the company purchased online reservations service SeatMe and integrated a reservations service into its app the following year, though that sphere continues to be dominated by OpenTable and startups like Resy and Tock.

• Yelp Is Selling Eat24 to GrubHub for $287.5 Million [The Verge]
• GrubHub’s Eat24 Purchase May Make It Only Place to Order Restaurant Delivery [QZ]