Food Delivery Giant Just Eat Offloads Grubhub to Marc Lore’s Wonder at a 90% Loss

Fine-dining delivery service Wonder is known for its partnerships with past Michelin star recipients like José Andrés and Bobby Flay. Grubhub’s most popular item is a burrito bowl. But there is plenty of accounting for taste in the nearly $30 billion food delivery market. 

On Wednesday, Wonder gobbled up food ordering and delivery platform Grubhub for $650 million. The global delivery giant Just Eat Takeaway, the seller, had acquired the company in an all-stock deal for $7.3 billion in 2020.

Eat Your Losses

The latest venture of serial entrepreneur Marc Lore — the man who brought you Diapers.com (sold to Amazon) and Jet.com (sold to Walmart) — Wonder started out in 2018 as a high-end food truck delivery service and then evolved into food halls, with 28 in five east coast states and 20 more on the way, according to its website. Delivery customers can order from the tens of restaurants at each location where staff hastily churn out meals designed by top chefs like Flay.

Last year, Wonder also entered the meal kit business with its $103 million acquisition of Blue Apron, hinting at plans to expand into a wider one-stop-shop food app. Investors last valued the business at $3.8 billion in a 2022 round, according to Pitchbook data. Wonder also announced Wednesday that it raised $250 million from new investors, though it didn’t disclose a valuation. One key question hangs over all the news: Can companies in this line of work make money?

• Just Eat Takeaway, Deliveroo, Delivery Hero, and DoorDash piled up $20.3 billion in operating losses from the time they went public until May of this year, according to calculations by the industry analyst theDelivery.World and the Financial Times. So it’s little surprise that Wonder will pay just $150 million in cash for Grubhub and assume $500 million of debt.
• Just Eat reported a €301 million ($317 million) net loss in the first half of this year, up from €258 million ($272 million) in the same period last year. But it said adjusted EBITDA in North America, where Grubhub was its primary delivery operation, increased by 57% to €80 million ($84 million), so maybe Wonder is on to something.

Hungry Like The Wolves: Not all deals digest as well. Sports fans may know Lore’s name from his minority ownership in the NBA’s Minnesota Timberwolves, and his attempt to buy the team with former baseball star Alex Rodriguez. Current owner Glen Taylor claims they missed an option payment earlier this year and tried to call off the deal — it’s now embroiled in a legal arbitration, while Lore and Rodriguez brought in some big guns, Michael Bloomberg and Eric Schmidt, to shore up their group of partners.