Groupon, a company known for connecting consumers with local deals, has acquired a food delivery startup: OrderUp. The financial details were not disclosed.
Founded in 2009, OrderUp operates in 26 states, predominantly in or around college towns. The startup says it has processed more than 10 million orders.
“The potential in delivery and takeout is apparent — especially with the growth of mobile — and OrderUp’s operational ability, coupled with Groupon’s engaged customer and merchant base, bring tremendous scale to the space,” said Groupon CEO Eric Lefkofsky in a statement. He also noted that food delivery was a “natural extension” of the products and services that Groupon already offers.
There has been something of an explosion in recent years in food delivery services. Startups like Munchery, Caviar, Fastbite (acquired by Caviar), Spoonrocket, and Sprig have all caught a lot of attention (and money) for their meal delivery services. Food delivery is so hot right now that even car-hailing app Uber ferries meals.
For Groupon, which has struggled to grow its business in recent years, food delivery is a tantalizing option.
In Q1 of this year, it looked like Groupon’s efforts to move away from daily deals was working; revenues were up well above analyst expectations. However, Groupon’s stock has been on the decline for the past three months. Some analysts say that’s because the stock is undervalued. It could also be because Groupon made big promises for heavy growth in the coming months and investors may be skeptical.
Food delivery could be a great way for Groupon to expand its business, especially as OrderUp caters to markets where there are fewer delivery options.
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