CHICAGO, Ill. (March 9, 2011) — GrubHub, a web and mobile service that connects diners to restaurants and simplifies online ordering for delivery and carry-out, has raised $20 million in Series D funding led by DAG Ventures with Benchmark Capital participating. The new round comes after preemptive interest and just four months after the company’s $11 million funding led by Benchmark in November 2010. The Series D funding will enable GrubHub to expand its investment in R&D, acquisitions and mobile applications while increasing its reach to more new markets. The company has raised $34 million to date.
“GrubHub is the market leader in the restaurant online ordering space,” said John Cadeddu, Managing Director at DAG Ventures. “GrubHub has clearly demonstrated its ability to double its growth year over year by successfully launching new markets and driving more orders through its mobile platform. This is a scenario where both the business model and leadership is top in its class, and our investment can be put to immediate use to fuel growth and reinforce market dominance.”
Frustrated by the lack of restaurant delivery information available on the Internet, founders Matt Maloney and Mike Evans created GrubHub in 2004 to organize and simplify restaurant information available to consumers. Visitors to the site or mobile users enter their address to see every local restaurant that delivers to them. Diners can view menus and coupons, read reviews and order for free online, by phone or through the GrubHub iPhone and Android apps.
“Right now, with over 13,000 restaurant menus on our site, we have one of the largest networks of independent restaurants,” said Matt Maloney, CEO of GrubHub. “Within the next three months, we’ll list over 80,000 restaurants. By connecting hungry diners to all their neighborhood restaurants, we are providing a valuable service to consumers and restaurants.”
GrubHub sent $85 million in orders to restaurants in 2010 and is projected to send $200 million in orders by the end of this year.
“Since closing its last round, GrubHub has aggressively scaled its business and is rapidly becoming the category defining company in this space,” said Bill Gurley, general partner of Benchmark Capital. “This additional funding will further support GrubHub’s momentum and enable it to follow in the footsteps of Benchmark’s other on-line portfolio companies such as OpenTable, Yelp and Zillow, which all share a template of local, social and mobile components.”
Since launching a beta Android app and an updated iPhone app in September, GrubHub has experienced a 300 percent increase in mobile food orders. The company projects mobile orders to make up 20 percent of its total food sales by the end of 2011—compared to less than two percent in 2009. The service is currently available in the top 13 metro markets, and will be in over 26 cities by the end of this year.
GrubHub is free for diners who order and pay for their meals with cash, credit or PayPalâ„¢. Restaurants pay commissions on each order processed through the site in order to receive online orders that are supported by GrubHub’s 24/7 customer service. Restaurants that do not currently partner with GrubHub can still list their telephone numbers and menus for free — a service that GrubHub’s competitors don’t offer.
“There are more than 300,000 delivery and takeout restaurants in the country. On average, GrubHub users order out more than 10 times a month,” said Maloney. “Pickup and delivery are the fastest growing segments in restaurants and one of the largest sectors of the U.S. economy. With more people searching for restaurants and ordering food on-line and through smartphones, the opportunity for continued growth is substantial.”
About GrubHub
GrubHub is a ventured-backed company founded in 2004 by Chicago-based software engineers Matt Maloney and Mike Evans. The website shows consumers all of the local restaurants that deliver to them and allows diners to order directly online, by phone or through the GrubHub iPhone and Android app. Both apps are free from their respective app markets, and it is also free for users to order online at GrubHub.com.
A year after winning the University of Chicago New Venture Challenge, GrubHub secured Series A funding in 2007 through Amicus Capital, Origin Ventures and several angel investors, allowing the company to rapidly expand into the top three delivery markets — New York City, San Francisco and Boston. GrubHub secured $2 million in Series B funding in March 2009. The deal was co-led by Origin Ventures and Leo Capital, with earlier investor, Amicus Capital, participating. In November 2010, the company raised $11 million in Series C funding led by Benchmark Capital.
The rapidly growing company currently services Chicago, New York, Los Angeles, San Francisco, Boston, Philadelphia, Washington D.C., San Diego, Oakland, Seattle, Portland, Denver and Boulder and has plans to double its footprint in 2011. For more information visit www.GrubHub.com.
About DAG Ventures
DAG Ventures, headquartered in Palo Alto, CA, is a venture capital partnership investing in and helping outstanding entrepreneurs create leading, long-term companies across a range of markets. With roots from the 1980’s in cable TV, infrastructure, media, and wireless industries, the partnership today is privileged to work with world-class entrepreneurs as they build tomorrow’s leaders in the information technology, energy, and life science sectors. For more information on DAG Ventures, visit www.dagventures.com.
About Benchmark Capital
Benchmark Capital, a leading venture capital firm, was founded in 1995 to help talented entrepreneurs with original ideas build successful technology companies. Benchmark’s general partners take a team-oriented, labor-intensive approach to venture investing to deliver a superior level of service to the firm’s portfolio companies. Benchmark’s portfolio includes high-profile companies such as MySQL, OpenTable, Twitter, Yelp and Zillow, and franchise companies such as eBay, Juniper Networks and Red Hat. The firm manages more than USD 2.4 billion in committed venture capital. For more information on Benchmark Capital, visit www.Benchmark.com.
