Grubhub Gobbles Foodler as Online Food-Ordering Sector Consolidates

The shakeout of the crowded field of online food-ordering and delivery companies continues.

Chicago-based Grubhub (NYSE: GRUB) has signed an agreement to acquire Boston-based rival Foodler. Terms of the all-cash transaction weren’t disclosed.

The deal will add more than $80 million of annualized gross food sales to Grubhub’s business in 2017, according to a press release. The move also gives Grubhub a stronger foothold in New England and expands the company’s network of 55,000 restaurant partners and 8.8 million active users. Grubhub enables people in more than 1,100 U.S. cities (and London) to order food on demand through its website and mobile app.

As of February, Foodler said it had 100 employees and more than 500,000 active users. The 13-year-old company built its business without raising outside capital.

Online food ordering and delivery has been one of the most competitive—some would say frothy—sectors of the tech industry over the past few years. Unsurprisingly, that has bred plenty of consolidation and business closures.

Grubhub has been one of the sector’s more active dealmakers. Its other acquisitions include Campusfood, Allmenus, DiningIn, Restaurants on the Run, Delivered Dish, LAbite, and a merger with Seamless. Not all of Grubhub’s deals have been with food ordering or delivery startups. Last year, it bought food recommendation software company Bask Labs.

Elsewhere, recent deals in the sector include Madison, WI-based EatStreet’s partial acquisition of Philadelphia-based food delivery startup Zoomer.

The buyers in this market haven’t all been food ordering or delivery companies. Yelp, the online business listing and reviews site, and Square (NYSE: SQ), the payment processing company, moved into online food ordering with their acquisitions of Eat24 and Caviar, respectively. And Uber, the ride-hailing app company, created its own food delivery service.

Some food delivery startups haven’t survived. Sprig, SpoonRocket, and Chef Nightly are among those that shut down.

Now, the bigger questions are when the deal-making will subside, and whether a clear winner will emerge.

Trending on Xconomy