GrubHub, the largest online delivery service aggregator in the US, filed for an IPO on Friday morning with a valuation of US$1 billion. The company currently partners with 29,000 restaurants – mostly independents - in 600 cities, allowing consumers to place orders for food delivery directly through the online platform. The company’s US figures are impressive, at US$1.3 billion in reported sales in 2013 from a total of 3.4 million diners and an average of 135,000 orders per day.
GrubHub’s business is confined to the US, but this move speaks to growing interest and investment in delivery service from all restaurant types around the world. Growing sophistication and increasingly hectic lifestyles among global diners have bolstered the appeal of delivery, and it has grown particularly popular among busy office-workers who have a universal appreciation for quick lunches or dinners at home after a long day. Many fast food leaders such as McDonald’s, KFC, and Pizza Hut are thus taking steps to increase their delivery presence in key growth markets like China, India, Russia and parts of Southeast Asia, and independents are following suit as interest in the channel grows. This has made platforms like GrubHub all the more necessary, as they allow small independents to compete on a more level playing field and give consumers a one-stop-shop online delivery experience. It’s also notable that this boom is not confined to emerging growth markets: Japan, in particular, is seeing a boom in delivery demand driven by its ageing population. 7-Eleven’s home delivery service has been very successful for the brand, and McDonald’s added delivery service to Japanese outlets in 2013.