Grubhub, the online and mobile food-ordering company, announced in its second-quarter earnings release the acquisition of LevelUp for $390 M paid in cash. The release also revealed a 70% year-over-year growth in active diners and 51% revenue increase. As a result, Grubhub’ shares skyrocketed, reaching an all-time-high price of $138.85 per share.
LevelUp is a provider of online solutions for management of digital ordering, payments, and loyalty. In 2011 the company launched its platform and managed to raise a total funding of around $108 M from Google Ventures, Highland Capital, and Deutsche Telecom Strategic Investors.
On the buyer side, a Grubhub representative explained the deal has a strong strategic focus – it will allow the company to further integrate its operations with restaurants’ point-of-sale systems, and hence ensure handling more deliveries. In addition, Founder and CEO Matt Maloney believes the investment will allow Grubhub to further enhance the restaurant platform by featuring customer interaction capabilities: “We want to help restaurants actively engage with their diners. This is a huge step in that direction”.
Besides the plans for deeper POS integration, Mr. Maloney does not intend to drastically change the business of LevelUp in the short-run. The CEO named Level Up’s solution “the best white-label product in the business” and ensured the companies will be patient enough until they find the optimal way to collaborate.
Grubhub to Acquire Payments and Loyalty Company LevelUp for $390 M
