GrubHub, a service that allows users to order takeout or delivery food from their computers or through mobile applications, has raised $50 million in venture capital. The company, which raised a previous round of $20 million six months ago, will also announce Tuesday that it has acquired Dotmenu, another online food delivery network.technology/20bits-grubhub/20bits-grubhub-articleInline.jpg" alt="GrubHub says it has handled $200 million in delivery and pickup orders since 2004." width="190" height="209" />Todd Heisler/The New York Times
GrubHub has established itself as one of two leaders in the online food delivery market. Since 2004, it has handled over $200 million in delivery and pickup orders, according to the company. The service is free for users; restaurants pay a commission to GrubHub, which says it is already profitable. Its Web site had 173,000 unique visitors in June according to Comscore, significantly more than its closest competitor, Seamless.
Both sites say they are seeing an increasing proportion of their business coming through smartphone apps. GrubHub expects to be almost entirely a mobile service within five years.
GrubHub and Seamless have been in a race to add more restaurants to their services, with each claiming an advantage. In New York City, for example, GrubHub claims relationships with over 5,400 restaurants, significantly more than Seamless. But fewer than half of those restaurants allow online ordering and instead show only a scanned version of the menu and a phone number.
GrubHub sees its acquisition of Dotmenu, which runs the sites Campusfood and Allmenus, primarily as way to increase its stable of restaurants. With Dotmenu’s business folded into GrubHub, the combined company will operate in 50 major cities, as well as many college towns. GrubHub currently operates in 19 markets. The company plans to allow online ordering through Dotmenu’s restaurants, but it is unclear how soon. Terms of the acquisition were not disclosed.
The round of venture funding was led by Lightspeed Ventures with Mesirow Financial, Benchmark Capital, Greenspring Associates and DAG Ventures participating.