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Online Food Acquisitions are just eating each other up, Yelp grows a belly!

Holy Mack­er­el, come to think of it, you may want to con­sid­er order­ing that! This week Yelp announced it pur­chased online food order­ing ser­vice Eat24 for $134 million.

This from Yelp’s blog: Eat24 is an online food order­ing app and web­site that cov­ers about 20,000 restau­rants across the coun­try. As a Yelp Plat­form part­ner, they’ve been a valu­able dri­ver of our growth in the restau­rant cat­e­go­ry while con­tin­u­ing to build an impres­sive busi­ness of their own.

Eat24 is a com­peti­tor to Grub­hub. They were found­ed in 2008 and had man­aged to get a wid­get for order­ing food on Yelp which allowed them to com­pete against the oth­er food order­ing sites. Now that this deal is hap­pen­ing, these two com­pa­nies will become BFF’s. Jere­my Stop­pel­man, Yelp’s chief says online order­ing is “a key ver­ti­cal for Yelp.” The objec­tive is to “enhance our user expe­ri­ence [allow­ing] our large con­sumer audi­ence to trans­act direct­ly with businesses.”

You should also make note that while they’ve spent a bun­dle of mon­ey acquir­ing Eat24, they also plan on expand­ing their ad sales staff by 40 per­cent this year.

Now when you look at Grub­hub, their most recent quar­ter­ly report which was quite good you’ll under­stand why they are acquir­ing online restau­rant deliv­ery ser­vice — DiningIn — and entered into an agree­ment to take over anoth­er online deliv­ery ser­vice — Restau­rants on the Run — mark­ing its entry into the food deliv­ery busi­ness. So this dynam­ic deal should cost Grub­hub about $80 mil­lion and get them deliv­ery busi­ness from 3,000 restau­rants across all major U.S. cities.

Mar­ket reports claim food deliv­ery com­pa­nies charge a 20–30% pre­mi­um for their ser­vices, but GrubHub’s charges are much cheap­er. This pric­ing has afford­ed them a sig­nif­i­cant growth in the past (aver­age din­ners increased 47% year over year in 2014 organically).

Unfor­tu­nate­ly for Grub­hub, Ama­ and Google Inc. have been tak­ing an inter­est in the deliv­ery mar­ket; but these new acqui­si­tions by Grub­hub are good since they add vol­umes and scale to its busi­ness. If Grub­hub sur­vives with its low­er-mar­gin busi­ness mod­el, it might put pric­ing pres­sure on com­peti­tors like Square, which recent­ly signed a deal to acquire on-demand restau­rant deliv­ery start-up, Caviar.

Let’s con­sid­er how this indus­try has tak­en off over­seas with online food deliv­ery ser­vice provider Food­pan­da, which has acquired the Indi­an oper­a­tions of Just Eat, a UK-based com­pa­ny in the same busi­ness. Some his­to­ry for you — Just Eat India used to be Hun­gry­Ban­ga­lore back in 2006. At present the Indi­an online food deliv­ery indus­try is esti­mat­ed to be worth $14 bil­lion. With this buy Food­pan­da will expand its pres­ence in India to 200 cities and part­ner­ships to 12,000 restau­rants. It also turns out that this is the sec­ond Indi­an acqui­si­tion by the com­pa­ny in three months. In Novem­ber, it had acquired TastyKhana.

But wait! There’s more, Food­pan­da has gone and done deals in Malaysia, Philip­pines, Pak­istan, Sin­ga­pore, and Thai­land. The com­pa­ny has ful­ly acquired Food Run­ner, which also has a fran­chise rela­tion­ship in Indonesia.

These acqui­si­tions will make them Boss across the South-East-Asian and Asian food delivery.

In a press release Ralf Wen­zel, Co-Founder and CEO of food­pan­da group, has been quot­ed say­ing “With the recent acqui­si­tions food­pan­da becomes the mar­ket leader across South East Asia. The com­bined exper­tise and expe­ri­ence of sev­er­al great local com­pa­nies allow us to sig­nif­i­cant­ly improve our offer­ing and ser­vice to our customers”.

Let’s not for­get the pur­chas­es in Europe as well, like, a food deliv­ery ser­vice active in Ser­bia, Mon­tene­gro and Bosnia and Herze­gov­ina, along with in Croa­t­ia and Net­Pin­cer in Hun­gary. Glob­al­ly, the com­pa­ny is active in 39 coun­tries on five con­ti­nents. Accord­ing to a report in The Eco­nom­ic Times, Food­pan­da will even­tu­al­ly merge TastyKhana and Just Eat India, to bring its food deliv­ery offer­ings under one brand.

Ladies and gen­tle­man, this online food deliv­ery busi­ness is boom­ing and it’s just going to get big­ger. The lazi­ness of peo­ple and the grow­ing fact peo­ple just are not taught the sim­ple art of boil­ing an egg means more mon­ey in the pock­ets of those that con­nect the restau­rants with the mouths that want it. I would def­i­nite­ly rec­om­mend get­ting on top of this line of media work, who knows you just may get some free appe­tiz­ers out of it.

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