CHICAGO — Chicago-based food ordering startup GrubHub is merging with New York-based rival Seamless, creating a company with more than $100 million in revenue and a combined network of more than 20,000 local takeout restaurants across the U.S.
GrubHub and Seamless connect diners to restaurants that offer takeout and delivery, taking a cut of transactions processed through their technology platforms. The companies said they collectively processed about $875 million in food sales last year via their website and mobile applications. They have operations in more than 500 cities in the U.S.
“I’m excited about three things: I’m excited about the expanded restaurant network that our diners will be able to use,” GrubHub co-founder and Chief Operating Officer Mike Evans, who will be COO at the combined company, said in an interview. “I’m excited about the larger number of diners available to restaurants, and finally, the combined products for the two companies makes for a stronger offering.”
Financial terms of the transaction were not disclosed. The companies said they have yet to determine the name of the combined entity and make other branding decisions. GrubHub employs about 350 people and Seamless has more than 300 employees. Evans said no one will be laid off as a result of the merger. The new company will have offices in Chicago, New York, Salt Lake City and London. “I don’t feel the need to specify a headquarters,” Evans said.
GrubHub co-founder and Chief Executive Matt Maloney will be CEO of the new company, while Seamless CEO Jonathan Zabusky will be president.
Evans and his co-founder Matt Maloney were two hungry software engineers working at Apartments.com when they hatched the idea for GrubHub. The startup was launched in 2004 and is one of Chicago’s most high-profile startups, having grown rapidly and raised $84.1 million in venture capital through five rounds of funding. GrubHub and Seamless said their investors “will both have significant representation on the combined company’s board of directors.”
GrubHub and Seamless, while they have been competitive in cities such as Chicago for several years, have different historical strengths. GrubHub is focused on the consumer segment of diners ordering food at home in the evenings, while Seamless got its start on the corporate side, connecting restaurants with employees who could expense their meals.
“I’m excited about their restaurant network, definitely,” Evans said of Seamless. “It’ll be interesting to look at their corporate client base. And they have a really strong presence in several key cities in the U.S.”
GrubHub also boasts a national footprint and in 2011 acquired Dotmenu, the parent company of restaurant ordering websites Campusfood and Allmenus. That acquisition boosted the startup’s listing of restaurant menus to 250,000 and gave it access to customers at college campuses across the U.S. Seamless, meanwhile, acquired Menupages in 2011, adding more than 50,000 menus to its roster. It also serves more than 4,000 clients through its corporate segment.
“This merger is an opportunity to glean the best from each platform,” Zabusky said in a statement.
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