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Grubhub, one of the top online delivery services in the nation, announced that it will acquire LevelUp for $390 million. The announcement came in the company’s second quarter earnings release.
The acquisition will make it easier for restaurants in its service pool to integrate into the Grubhub marketplace.
LevelUp is a mobile ordering and payments platform that restaurants can integrate into their business to offer rewards and discounts for loyal customers. Some of their clients include Chopt, Sweetgreen, and Potbelly Sandwich Shop.
“LevelUp’s leading restaurant-facing technology and the team they have built in Boston will help Grubhub provide the most comprehensive solution for restaurants, powering everything from online demand generation to fulfillment for restaurants,” said Grubhub’s CEO Matt Maloney in the release.
LevelUp processes more than 100,000 orders a day, representing roughly $400 million in annual restaurant sales. The LevelUp business is almost exclusively pickup orders, which is an area that Gruhhub has been looking to accelerate.
With brands that also include Seamless and Eat24, Grubhub has been gobbling up food-takeout companies in recent years in a bid to gain scale as the market for digital food-ordering continues to grow.
Jeff Sopko, president of Baesman, commented on the recent acquisition, “It will make payments more convenient for Grub Hub partners, it will give them more insights into restaurants and customers, and it can keep customers coming back through rewards. While LevelUp might remain somewhat independent, the benefits Grub Hub will receive help protect them from competition like Amazon Restaurants, Uber Eats and Postmates.”
With the purchase, Grubhub would add point-of-sale capabilities in addition to being in the delivery and online order-aggregation business, said Matthew DiFrisco, an analyst for Guggenheim Securities LLC.
Grubhub, founded in 2004, works with more than 85,000 restaurant partners in over 1,600 U.S. cities and London.
Last week, Grubhub said it expanded delivery capabilities across dozens of markets in 17 states including California, Pennsylvania, and Florida.
Maloney stated that the acquisition won’t change much for LevelUp’s business operations and it’s possible that the company may continue as its own brand.
Mark Johnson, CEO of Loyalty 360, detailed the importance of the acquisition, “This move by GrubHub is important for two reasons. One, this shows the tremendous strides online food-ordering brands, such as GrubHub, have made in terms of customer engagement. Lastly, with GrubHub’s already outstanding business platform in place, the partnership with LevelUp will surely help them take their engagement/loyalty efforts to the next level. At Loyalty360, we continue to see brands breaking into new molds within the industry. GrubHub’s strategy is not only unique to our readers but quite germane in terms of relevancy. Good on them.”
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