Food ordering company Grubhub to buy Yelp’s food delivery service Eat24

Grubhub, the Chicago-based online food ordering company will acquire Yelp’s food delivery service Eat24 business for $287.5 million in an all-cash deal.

Along with the transaction, Grubhub and the online business directory Yelp have forged a long-term partnership agreement which would begin from the time of closing of the Eat24 acquisition by the online food ordering company.

Under the terms, the partnership which will have an initial term of five years will see tens of thousands of order-ready restaurants from the Grubhub network added to the Yelp Platform to grow the availability of food delivery through the local business directory. It will also bring about usage and transaction velocity in the most highly-trafficked category in Yelp.

Grubhub acquisition of Eat24, a food delivery app is also claimed to benefit diners and restaurants. This is so because Grubhub and Eat24 will be in a position to create a large network of restaurants providing online and mobile food ordering in the US.

Commenting on Grubhub acquisition of Eat24 from Yelp, Grubhub’s founder and chief executive officer Matt Maloney said: “Adding Eat24’s large diner base and thousands of restaurants to our platform will accelerate Grubhub’s mission to become the most comprehensive marketplace connecting takeout diners and restaurants.

“The long-term agreement ensures that Grubhub also has access to Yelp’s enormous user base and clear content leadership to help drive more diners to our restaurants.”

Eat24 acquisition by Grubhub is expected to enable diners discover and order from nearly 75,000 local restaurants through Yelp’s interface or through the Grubhub platform while benefiting from what are claimed to be the lowest diner fees in the industry.

Grubhub’s restaurant partners thanks to the Eat24 acquisition will have an opportunity to reach out to new potential diners which in turn is bound to increase their orders and revenue.

Eat24 restaurant partners will also be in a position to attract new diners and additional revenue after getting added to Grubhub’s diner network.

Commenting on Eat24 acquisition by Grubhub, Yelp’s co-founder and chief executive officer Jeremy Stoppelman said: “Bringing Grubhub onto the Yelp Platform through this long-term partnership will be a win for everyone. Consumers get a high-quality end-to-end experience with a wider selection of restaurants and better delivery options.

“Restaurant partners receive increased online exposure and the opportunity for increased order volume, as well as expanded delivery support. Yelp and Grubhub benefit from greater scale and sharper operating focus.”