Startup Food Chain

After $2.67B GrubHub IPO, VCs Are Hungry For Food Delivery Apps

(photo via Lucius Kwok))

Since GrubHub Seamless went public with a valuation of $2.67 billion, venture capitalists are racing to find the next hit food delivery app for their portfolios.

According to the report on the CB Insights blog, investments in food tech in the first quarter of 2014 (Q1) were the highest they’ve been in five years. Over $200 million went to food and grocery apps during those three months, which was the biggest VC investing boom in over a decade.

Most of these are small, local apps that focus on a particular set of stores and services, whereas GrubHub and Seamless are nationwide giants with a combined 25 years under their belts. The two companies merged last year, and served over three million customers nationwide in 2013 alone. Read More

Food Fight

Following Merger, GrubHub and Seamless Hit with Temporary Antitrust Rules

Attorney General Eric Schneiderman (Photo: oag.state.ny.us)

Two of the city’s biggest online food delivery companies merged in May — but New York Attorney General Eric Schneiderman is hoping to keep the online food ordering game competitive with a few new rules (well, for now).

Mr. Schneiderman today announced a settlement with GrubHub and Seamless. The agreement states that the companies will no longer be allowed to form exclusive agreements with certain vendors, a release from Mr. Schneiderman’s office states, and they must sever any existing ties within the next 45 days. Read More

Food Fight

Never Leave Your Apartment Again: Seamless and GrubHub Are Merging

seamless

After rumors swirled the past few days that food delivery companies GrubHub and Seamless were in talks to merge, the news is now official. Bloomberg reports that the companies are combining in an effort to out-deliver their competitors in the fast-growing online ordering sector.

Matt Maloney, CEO of Chicago-based GrubHub, will lead the merged entity while New York-based Seamless CEO Jonathan Zabusky will be its president. Financial details have not yet been released but neither company is paying to acquire the other. The company will be rebranded, although a new name hasn’t been selected. Read More

startup rundown

Startup News: Etsy Goes Big for Christmas and Bloomberg Giving Away Big Prize to Makers

Mr. Dickerson (Photo: Twitter.com)

Lots Of Tiny Wicker Puppets Sold Etsy CEO Chad Dickerson took to the company’s blog to address his craft-obsessed minons and report big new numbers. Etsy recently hit 20 million members across over 200 countries. In the first week of November, they passed the $700 million sales mark and their direct checkout system has now processed over $100 million in transactions. By the end of the year, Etsy projects that it will have sold over 100 million items in the company’s history.

The company is also going all out for the holiday season and expects to have its best month yet. It’s running a multi-million-dollar online advertising campaign and opening a Etsy Holiday Shop in SoHo from November 29th through December 8th. SoHo though? Isn’t Greenpoint or Williamsburg more on target with the Etsy brand?

Chu Bets Against Zynga Betable has already announced partnerships with big game companies and is right on the path to become the Spotify of online gambling and pass its closest rival, Zynga. Ya-Bing Chu, a former VP and GM of Zynga’s mobile division, has now joined Betable as the company’s new Chief Product Officer. At Zynga, he was responsible for operating Words with Friends and Scramble with Friends. Mr. Chu explains the move in an essay on Betable’s blog, where he says, “I realized that Betable was the only frictionless way to enter the real money market, which is revolutionary.” Read More

Food Fight

FoodToEat Takes on Seamless and GrubHub With Low Fees and Food Trucks

Ms. Kapur.

As if Seamless didn’t have enough to worry about with GrubHub nipping at its heels. Ever heard of online food ordering service FoodToEat? Maybe not, as the young startup has been quietly growing in beta. But FoodToEat launched in June 2011 and after a recent redesign, founder Deepti Sharma Kapur, 25, is ready to feed her public.

FoodToEat offers food from 500 restaurants, and Ms. Kapur charges vendors just $.10 per order–a huge savings compared to her competitors, who she said charge between 10 and 18 percent.

FoodToEat has also signed up 50 food trucks, thanks in part to the fact that Ms. Kapur speaks four languages. The original inspiration for the site came when she was preparing for the LSAT and pondering how many minutes of studying the long line at Treats Truck would cost her. Read More

Ribbon-Cuttings

Mayor Bloomberg Stops by New Seamless Office

seamless bloomie

The Mayor is on a techie ribbon-cutting roll lately. Twitter office. Facebook engineering headquarters. New York Tech Meetup appearance. Yelp office opening. Cornell-Technion tech campus. Mike Bloomberg wants to be remembered for his impact on the New York internet industry, and today he stopped by a granddaddy of web startups: the company formerly known as SeamlessWeb. “Seamless is exactly the type of company we’re looking to grow,” the mayor said as he ordered chicken soup for lunch. “Seamless is transforming the city’s restaurant industry.” Read More

Food Fight

Seamless, Fresh Out of Corporate Fetters, Buys MenuPages for $15 M. as GrubHub Comes Nipping

(thedeliverybag.com)

New York City-based online food ordering service Seamless, born SeamlessWeb during the dotcom boom in 1999, has purchased Menupages from New York magazine publisher New York Media for $15 million and the right to sell advertising against MenuPages content for a year, Betabeat has learned.

New York Media Holdings CEO Anup Bagaria, who would not disclose the price but said it was “significantly more than we bought it for,” said the reason for selling MenuPages, which “has actually grown 100 percent since we’ve purchased it” in 2008, had to do with New York Media’s reluctance to invest in growing the business beyond advertising revenues.

Mr. Bagaria says New York Media started thinking about a sale at the end of the first quarter of 2011, when an undisclosed buyer approached with an offer for MenuPages. The unsolicited offer could have come from a long list of related companies, but Betabeat’s sources think was most likely either Zagat, which was exploring the possibility of adding menus to its reviews before it was acquired by Google; or the London-based Just-Eat, which raised $48 million to expand globally around the same time.

The offer inspired New York Media to find out who else might be interested. By the time the publisher was done, a source familiar with the situation says, it had spoken to a number of companies including Google, the publicly-traded reservation service OpenTable and Just-Eat.

For Seamless, the MenuPages acquisition is the latest in a string of aggressive moves spurred by fierce competition in an increasingly-heated market. Seamless has maintained a serviceable but increasingly stale product since it was bought by corporate caterer ARAMARK in 2006. But in June, Seamless spun out from under ARAMARK, raising $50 million in outside investment. Now, after years of complacence, Seamless is going after the consumer market with renewed vigor. Seamless’s fiercest competition comes from GrubHub, a seven-year-old Chicago upstart that completed a parallel purchase last week: the acquisition of Dotmenu, owner of online ordering site CampusFood and menu library AllMenus.

MenuPages actually approached GrubHub about an acquisition earlier this year, but “we couldn’t come to an agreement on price,” GrubHub CEO and co-founder Matt Maloney said. However, one source points to the timing of GrubHub’s Dotmenu acquisition, which was likely already in the works.

The rivalry between Seamless and GrubHub started long before the bidding war over MenuPages, however. Read More