What's Happening?
Grubhub, founded in 2004 by Matt Maloney and Mike Evans, has rapidly expanded its operations across major US cities, including New York City, San Francisco, and Boston. The company secured multiple rounds of funding, totaling $34 million, from investors such as Benchmark Capital and DAG Ventures. Grubhub's platform allows users to order food online, offering a free service for consumers while charging restaurants a commission on orders. Despite economic slowdowns, Grubhub has continued to grow, sending $85 million in orders to independent restaurants by the end of 2010.
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Why It's Important?
Grubhub's growth highlights the resilience of the online food delivery industry, even during economic downturns. The company's ability to secure significant funding and expand into key markets demonstrates the potential for startups to thrive with strategic financial backing and market penetration. Grubhub's model of charging restaurants commissions while offering free services to consumers has proven effective, providing a sustainable revenue stream and supporting restaurant partners.
What's Next?
Grubhub plans to double its footprint by expanding into more than 26 cities by 2011. This expansion will likely increase its market share and influence in the online food delivery industry. As Grubhub continues to grow, it may explore additional funding opportunities or strategic partnerships to further enhance its service offerings.
Beyond the Headlines
Grubhub's approach to market expansion, including hiring local managers to build networks in new cities, offers insights into effective strategies for entering diverse markets. The company's focus on supporting independent restaurants and providing exceptional customer service underscores the importance of building strong relationships with stakeholders.
