Netherlands-based food delivery company Just Eat Takeaway.com said on Wednesday that it is selling its U.S. business Grubhub to New York-based Wonder Group in a deal valued at $650 million — a stark 91% less than the $7.3 billion Just Eat Takeaway paid for the company just four years ago.
The deal is expected to close in the first quarter of 2025, and Just Eat Takeaway expects net proceeds of $50 million. Wonder, which started as a food delivery business in 2018 but has since pivoted to operating delivery-focused restaurants in New York and Philadelphia, will take on $500 million of Grubhub’s debt.
The divestiture comes as food and grocery delivery becomes an increasingly unprofitable endeavor for businesses that bet the farm on the model during the COVID-19 pandemic and later, when people sheltering in place and social distancing opted to order in food and grocery items they would previously buy in person.
The food delivery and quick-commerce sectors saw a massive influx of venture capital and other investment in the following years, with startups like Getir and Flink raising millions and investing aggressively in marketing and acquisitions.
But once the world returned to a semblance of normalcy and post-pandemic tailwinds trailed off, the instant delivery model proved unsustainable. Flink is now said to be valued at just under $1 billion, down from a peak of nearly $3 billion, while Getir has retreated, shutting down its operations in the U.S., the U.K. and Europe to focus on its home market of Turkey.
Just Eat Takeaway itself has been trying to sell Grubhub for years. The company first announced it was looking to sell Grubhub in April 2022 to focus on profitability, less than a year after closing the deal to acquire it, but last year, its CEO said a sale was proving to be “very difficult.”
“The sale of Grubhub to Wonder will increase the cash generation capabilities of Just Eat Takeaway.com and will accelerate our growth,” Jitse Groen, Just Eat Takeaway’s CEO, said in a statement. The company said the sale would allow it to invest in countries where it has a competitive advantage and generate free cash flow.
Wonder’s CEO Marc Lore said that the company aims to create a super app for food delivery through this acquisition.
“We’re excited to soon offer a curated selection of Grubhub’s restaurant partners directly in the Wonder app, alongside our owned and operated restaurants and meal kits. Bringing Wonder and Grubhub together is the next step in our vision to create the super app for meal time, re-envisioning the future of food delivery,” he said in a statement.
Wonder has raised more than $1.7 billion in funding, according to Crunchbase, with backers like Accel, Bain Capital Ventures, Google Ventures, Nestle and Forerunner Ventures.