Wonder is acquiring Grubhub

[jaymzcampbell]

Mentions the $650mln they'll pay Just Eat for it, neglects the fact Just Eat paid $7.3bln. Quite the write down. And in just 4 years.

[mikequinlan]

They are actually paying $150 mln in cash and taking on $500 mln in debt.

[that_guy_iain]

It's kinda funny since they beat Uber in the bidding war and Uber is probably one of two reasons why it's only worth 650 million now.

[popcalc]

Where did all the money go?

[bsimpson]

Those weird ghost kitchen things have more than half a billion dollars to spend on acquisitions?!

I wonder how this came to be - did they already have that big of a war chest, or did they hear they could buy a name brand and go back to their investors to finance it?

[skywhopper]

Looks like they only spent $150M in cash and took on $500M of debt to do the ancquisition. They raised $250M from outside investors to pay for it. So sounds like they have $100M to try to make a go of it.

I expect the value to go way down as they squeeze all sides of the equation: drivers, restaurants, and customers.

[JumpCrisscross]

I’ll look up the addresses of restaurants on Uber Eats, using street view, before ordering. Most of them are at bodegas or otherwise non-restaurant spaces.

[snarf21]

I see this is as simply buying scale more quickly than they could grow organically.

[skizm]

Apparently they have totaled ~$1.7B in funding according to Bloomberg:

> Lore’s startup also raised $250 million in equity investment, bringing the total amount of capital it’s secured to $1.7 billion

[xyst]

They don’t have jack shit. It’s all based on hype, keep the train rolling so the early investors can get their cut while the other suckers hold the bag

[KoftaBob]

They've raised $1.9B in funding over 6 funding rounds. How? Because their founder is Marc Lore:

> Lore was the CEO and co-founder of Quidsi, the parent company of a family of websites, including Diapers.com. Quidsi was sold in 2011 to Amazon for $545 million.

> Lore was appointed in September 2016 to lead Walmart's e-commerce division when his company Jet.com—an e-commerce website launched in 2014—was acquired by Walmart, Inc. Walmart purchased Jet for $3.3 billion.

https://www.crunchbase.com/search/funding_rounds/field/organ...

[refulgentis]

IMHO it's sort of the inverse*: its not that weird ghost kitchen things have $500 mil for acquisitions, its that Marc Lore has enough salesmanship to get private capital to lend $100M to get a turnkey delivery business for his food entrepreneurship, and the banker loans can pretty it up to sound like $600M, and the decision makers at GrubHub get a mildly-embarrassing outcome instead of an extreme outcome. (shutdown)

* I know a decent amount about finance, but don't practice it daily enough to find it second nature. I'd appreciate a similarly colloquial perspective from someone who reads me as naive.

[philip1209]

Grubhub has revenue, which means they might be able to finance the acquisition with debt.

[tootie]

I have a bad feeling about Wonder. One opened near my office and had a load of free meal promotions and it was packed. A few weeks later it went very quiet. I had a few meals and they were decidedly meh. The promise of ordering options across a dozen different cuisines is appealing but not when all of them are underwhelming.

[that_guy_iain]

They raised 250m and spent 150m cash on GrubHub with 500 in debt.

[gnabgib]

Discussion (26 points, 3 hours ago, 63 comments) https://news.ycombinator.com/item?id=42127304

[snarf21]

At first blush, this might seem like another silly roll-up. However, I believe in Marc Lore completely and it will be interesting to see what this becomes. This is bad news for DoorDash (imo).

[deprecative]

To be fair, DoorDash is bad news for DoorDash because a $8 meal costs $30.

[Centigonal]

I could see a world where Doordash, Toast, etc specialize in delivery from existing restaurants, while Wonder/GrubHub lean into an exclusive selection of food from ghost kitchens.

[geor9e]

This part feels like The Onion. 30 private taxis coordinating for your meal. "customers can order from upwards of 30 restaurants in a single order, with each item being made-to-order in a sequenced fashion so that they finish simultaneously and can be delivered to the customer together."

[yawnxyz]

whoa, they own Chai Pani and Fred's Meat and Bread, both of which are _excellent_ fast casual spots in Atlanta. It's just... it's like $28 for a Philly cheesesteak, so I've only been to each twice. edit: ok it's $16 each apparently, but still

But also, they own physical chains, real estate ("food halls" aka bougie food courts) and now... meal delivery? It sounds like the most expensive-to-operate things all squashed into one.

edit: and they own Blue Apron?! I feel like they're going to buy Candy Crush next

It's really hard to see how this is going to work out long-term.

[maronato]

I don’t think they necessarily own the restaurants. They license the menu and cook/sell from a ghost kitchen.

[bastardoperator]

Acquisition of Farming Simulator incoming...

[kridsdale1]

Meat and Bread is in Seattle and Vancouver too, and yes, it’s fantastic lunch.

[kridsdale1]

Microsoft bought Candy Crush for $75 billion.

[recursive]

Apparently Wonder is unrelated to Wonder Bread.

[Etheryte]

Also unrelated to Stevie Wonder.

[reaperducer]

Apparently Wonder is unrelated to Wonder Bread

The deal was paid for with Wonder's bread.

[sib]

I wonder (no pun intended) how much of this is driven by Marc's residual dislike of Amazon?

Amazon currently has a partnership with Grubhub to provide Grubhub delivery as a Prime benefit.

Amazon competed strongly (some might say unfairly) many years ago with Marc's first big startup, Diapers.com, and effectively forced him to sell to Amazon.

He later started Jet.com and sold it to Walmart - in many ways as a second chance to compete with Amazon.

[tamade]

"new kind of food hall" sounds much better than ghost kitchen

[objektif]

Wonder guy is a trader and I think this is a good trade. The question is who is he going to dump this whole thing to next?

[nemo44x]

Grubhub has fallen so far it's amazing. They (and Seamless who is the same thing in different regions) had such a big start but had their model disrupted. And while they were being disrupted they were trying to turn a profit as a public company and DoorDash just ate their market as they were in growth mode. Interesting sequence of events that led to them being acquired by Wonder.

[afavour]

Silly money, behaving stupidly.

I feel for the restaurant owners: not only were they forced into accepting the likes of Grubhub as a middle man, that same middleman now also owns restaurants that compete directly with them. If the restaurants have any power at all they should stop using Grubhub right now. I don’t know anyone still using it (which is crazy, Seamless used to dominate NYC).

I sincerely hope the entire thing burns to the ground. The last thing I need in my life is for all the restaurants in my neighbourhood to be soulless, VC operated chains.

[hinkley]

Delivery should be done as a coop between local businesses. Always should have been that way.

[timnetworks]

I refuse to use GrubHub and not only because it makes a $12 sandwich into a $22 sandwich, but also because small business needs cash. If you're tipping $2.37 on your credit card, kick bricks.

[madamelic]

I stopped using Seamless when the corner sandwich shop went from $15 on an $8 sandwich to $25.

It made my blood boil when the receipt had 3 different fees before we even got to the tip.

[chirau]

How do these deals work?

I am assuming, and I could be very wrong, that Wonder is smaller by market cap than Grubhub.

[andrewla]

What the heck is going on here? This feels very ZIRP-ey; private equity chasing disruption in the hopes of the next acquisition.

Is this just a race to the bottom as all these delivery companies burn cash to subsidize their failing model and hope that they can be the last one standing?

[ChrisArchitect]

[dupe] Some more discussion: https://news.ycombinator.com/item?id=42127304

[hoppyhoppy2]

[dupe "dupe" comment] https://news.ycombinator.com/item?id=42129024

[longtimelistnr]

Ghost kitchens are the biggest scam in the food delivery world. why would anyone pay for an unsanitary kitchen to fry them up some frozen food?

[pbamotra]

Wonder owns Blue Apron too.

[graypegg]

> [Wonder is] creating the super app for mealtime [...] re-envisioning the future of food delivery [...] pioneering a new category of “Fast Fine” dining.

Press release copywriting is such an artform in ways I'm sure they don't intend for. I don't think I could spin "ghost kitchen ordering app" into that much bullshit. That takes real skill.

[crmd]

Support your local restaurants. Don’t let these vampire platform companies enshitify your city’s food scene.

[fragmede]

Which is an empty platitude if restaurants won't meet customers where they are - on their smartphones. I'll use my local restaurants' app/webpage when there is one and get pick-up, but if there isn't one, I'll be real - I just use Doordash. When I've got people over and need to order food, it'll take 45 mins between everything else going on to figure out a restaurant, and then another hour to pick some food. And then someone changes their mind while on the phone with the restaurant. Orrrr (after we pick a restaurant) we just pass the phone around.

[standardUser]

Or just order from local restaurants using GrubHub. Most mark up their menu prices to absorb the hit they take from working with GrubHub and similar services. Some will encourage you to order directly or through a different 3rd party by including a flier with the delivery order. But many others only offer delivery through 3rd parties like GrubHub.

[deprecative]

We say shopping at Whole Foods, Walmart, and Kroger.

[xyst]

Yet another company propped up by private equity. Wonder Group raised $700M during a funding round in March 2024, with a total of $1.5B raised overall [1]

How long until it succumbs to the same fate as other PE funded companies (Foxtrot)? Then the people left holding the bag are the vendors that won’t get paid. Employees don’t get paid. Doors locked up one day with no reason.

Love how it has all of these celebrity endorsements as well to keep the facade going.

At the end of the day, it’s a glorified ghost kitchen.

[1] https://www.inc.com/rebecca-deczynski/wonder-marc-lores-fast...