It's a good time to be an online food delivery service. In the United States and in Great Britain, IPOs from GrubHub and Just Eat are far exceeding expectations and getting valuations in the multi-billion range.
GrubHub shares touched up to $40 during its initial public offering this morning, more than 50 percent above its offering price of $26 a share. The company raised $192 million and is being valued at about $2 billion in all. That $26 offering price, low as it turned out to be, was the result of a few previous raises. GrubHub initially was set to offer shares at $20 to $22, revised that price upward to $23 to $25 earlier this week, and then pushed it up again to $26.
The excitement for the company likely has to do with its merger with Seamless last year, which bumped its active users up from 1 million in 2012 to 3.4 million, contributing to a 67 percent rise in revenues. Couple that rise with the lack of a clear competitor — GrubHub just lists traditional restaurants as its main competition — and you get a good recipe for market success.
Across the Atlantic Ocean, too, online delivery platform Just Eat saw similar excitement in its IPO on Thursday. Essentially the international version of GrubHub, the London-based Just Eat raised £360.1 million, or about $600 million, in its IPO on the London Stock Exchange. Just Eat now has a market capitalization of £1.47 billion, or $2.44 billion, and operates in thirteen countries worldwide.
So yes, it's a good time to be in the online food delivery IPO business. GrubHub's pizza mascot can't even believe it.
This article is from the archive of our partner The Wire.