Morning Brew Daily
Grubhub Acquired to be a Part of New Super App & Advertisers Back in on 'X'?
Thu, 14 Nov 2024
Episode 453: Neal and Kyle discuss the selling of food delivery app Grubhub for a massive $6.5B loss and why former Walmart exec Marc Lore may be interested in acquiring it. Then, as some users delete their X accounts and move to other platforms, some brands are flirting to get back with X. Also, NYC approves a bill that will end broker fees that have been a burden for many renters. Meanwhile, Neal shares his favorite numbers including, Amazon’s discount store, NFL bettors beating DraftKings, and a 1 million flier points sweepstakes. Lastly, headlines to close out your day! Visit https://www.sage.com/morningbrew for more! Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Get your Morning Brew Book of Crosswords HERE: https://shop.morningbrew.com/ Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 - Celebrity Lookalike Contests 02:45 - Grubhub acquired 09:00 - ‘X’ Advertisers 12:45 - NYC Broker Fees 18:00 - Neal’s Numbers 23:30 - Headlines Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What happened with the Grubhub acquisition?
Oh, super handsome. You might actually be a celebrity now. It probably counts. We should do a Neil Fryman lookalike competition like Washington Square Park.
I would show up to that, but I would probably be the only person there.
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Reliable, well-made, lets me throw a lot of stuff in it.
Same reasons why CFOs love Sage. You slice and dice your data as you see fit, then throw it all into one pot and get a delicious meal of actionable insights.
Let's take this metaphor one step further. With the new AI and automation tools that Sage has added, you're slicing with cutting-edge razor-sharp knives as well. So fancy pot, but also fancy knives. I knew you were a phenomenal chef, Neil. And Sage is a phenomenal platform. Head to sage.com slash morningbrew. That's sage.com slash morningbrew.
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For our first story, Wonder Group has agreed to acquire food delivery startup Grubhub for $650 million. While that sounds like a lot of money, it's a steep decline from Grubhub's $7.3 billion valuation in 2020. Now, it's called Wonder Group because you're probably wondering what it even is.
Well, it's a, quote, new kind of food hall that operates 25 fast casual restaurants around New York City and New Jersey. This is the brainchild of entrepreneur Mark Lorre. Lorre previously sold Diapers.com. Yes, you heard that right. Diapers.com to Amazon for over $500 million and Jet.com to Walmart for over $1 billion.
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Chapter 2: Why are advertisers returning to 'X'?
Chapter 3: What are the implications of the NYC broker fees bill?
Reliable, well-made, lets me throw a lot of stuff in it.
Same reasons why CFOs love Sage. You slice and dice your data as you see fit, then throw it all into one pot and get a delicious meal of actionable insights.
Let's take this metaphor one step further. With the new AI and automation tools that Sage has added, you're slicing with cutting-edge razor-sharp knives as well. So fancy pot, but also fancy knives. I knew you were a phenomenal chef, Neil. And Sage is a phenomenal platform. Head to sage.com slash morningbrew. That's sage.com slash morningbrew.
We have 3,000 action stores in Europe and we celebrate with extremely low prices. For example, our Superfin Waschmittelpots, 18 pieces, only 2,99. And our Spectrum Sprühfarbe for perfect coverage, only 2,33. For even more extremely low prices, visit our stores or check out the app Action. Small prices, great fun.
For our first story, Wonder Group has agreed to acquire food delivery startup Grubhub for $650 million. While that sounds like a lot of money, it's a steep decline from Grubhub's $7.3 billion valuation in 2020. Now, it's called Wonder Group because you're probably wondering what it even is.
Well, it's a, quote, new kind of food hall that operates 25 fast casual restaurants around New York City and New Jersey. This is the brainchild of entrepreneur Mark Lorre. Lorre previously sold Diapers.com. Yes, you heard that right. Diapers.com to Amazon for over $500 million and Jet.com to Walmart for over $1 billion.
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Chapter 4: What are Neal's favorite numbers this week?
The deal marks another expansion of Lorre's vision for Wonder Group, which he plans to have IPO ready by 2027. with a target valuation of $30 billion. And his quote was, quote, bringing Wonder and Grubhub together is the next step in our vision to create the super app for mealtime, re-envisioning the future of food delivery. Neil, before we get to Wonder, final thoughts on Grubhub?
I feel like this is a fallen angel.
It is a little bit. I mean, this was a terrible acquisition by Just Eat Takeaway. They paid seven point three billion dollars for Grubhub at the height of the covid delivery boom. Now they sold it for ninety one percent less than that valuation. They really just kind of bought it at the top. Just looking at the market share of delivery apps in the United States right now.
Grubhub has a market share of 8% compared to 67% with DoorDash, and Uber Eats now has a 23% market share. So Just Eat bought Grubhub to get into the U.S. market, expand their European empire, and they are the biggest food delivery service in Europe. It did not work out as well. People started going back to restaurants, and the overall delivery market just hasn't grown as much as was expected. But
Now that we tied the bow on Grubhub, let's talk about Wonder, which bought Grubhub. What is your take on Wonder and what they're doing? I mean, it is a sensibly a startup that few people have heard of outside of maybe New York City of seeing these storefronts, but they have insane plans. I mean, $30 billion valuation is insane that if they do achieve that, that would be within 10 years.
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Chapter 5: What are the latest headlines?
Chipotle had a $30 billion market cap. After 30 years in business, Shake Shack is worth $5.5 billion right now. This company in its last wonder, in its last funding round, was valued at $5 billion. So clearly investors are betting on Mark Lurie. And you mentioned he had these incredible exits, $3.3 billion to Walmart by Jet.com.
So it's very interesting what he's doing here and playing around in the restaurant space.
Yeah, I mean, I think this is definitely a bet on the entrepreneur as much as it is the idea. And someone who's had this much success is Mark Lurie. It's probably a good check to give him more money and see what he does with it. Wonder, I'm actually one of the few people who maybe have gone to a Wonder. It's pretty differentiated. So it's not like a courier network like Uber Eats or Grubhub.
It actually is this like casual dining experience where they cook most of their food off-site. And then they bring it on site to a wonder food hall and it can be prepared with very little tooling in about three to five minutes. But it actually tastes like it's made fresh. That's their differentiated piece.
And they're trying to allow you as a family to come in and order from like four or five different restaurants all in one spot. Dozens of different restaurants. Yeah, they have 35, I believe, of fast, casual restaurants they operate. So it allows you to kind of pick and choose what you want instead of being reliant on one restaurant or one menu.
I think it's a pretty interesting idea, and it is different than what other players are doing in the space.
Yeah, one other differentiating factor is they've partnered with celebrity chefs. So they have they have menus inspired by Bobby Flay and Marcus Samuelson, Jose Andres and people like these. They've actually paid them to use their signature dishes to sell to people. And Mark Lurie wants to give customers a more elevated dining experience.
But what he does really is the goal here is a super app for mealtime. which I think super app is just a buzzy word. I don't know exactly what it means.
But now that he bought Grubhub, he wants to go from recipe development through the food preparation, through, you know, bought Grubhub's delivery drivers, through actually fulfillment to create this holistic experience for when you want food, they control everything. And he spent $60 million on IP alone. to own particular brands that they're selling out of these spaces.
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