Grubhub pushes further into college campuses with Tapingo acquisition
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Grubhub pushes further into college campuses with Tapingo acquisition

Online food order and delivery giant Grubhub has bought Tapingo, a similar service based in San Francisco that caters exclusively to students on 150 college campuses around the U.S. According to Grubhub, the service processes “tens of thousands” of orders a day, and the larger company purchased it for $150 million. Grubhub will add about 90 employees through the acquisition – most of which will remain in San Francisco.

Grubhub’s share price has appreciated by an incredible 93% so far this year

graph 1002 grubhub

SOURCE: Yahoo Finance

The company’s location is a big selling point, according to Grubhub’s chief procurement officer, Sam Hall, who talked up the region’s employability to the San Francisco Chronicle. He said: “Hiring is difficult. We’re super excited they’re already in San Francisco.”

In a longer statement, Grubhub’s CEO Matt Maloney explained the strategy behind the acquisition: "We value the college student population, many of whom we hope become life-long Grubhub diners with their first order. Tapingo makes students lives' easier, allows merchants to efficiently capitalize on online ordering and enables colleges and universities to give students the technology they expect."

Grubhub has made a spate of acquisitions in a growing industry. According to market researchers at The NPD Group, the restaurant delivery market in the U.S. alone has now “ballooned past 1.7 billion orders a year”, and Morgan Stanley sees sales of food ordered online surge to $16 billion in 2020. Last year, they were just $6 billion.

Within this huge and fast-growing market, college students are a particularly attractive demographic. They are more sophisticated foodies than their parents (as the numerous jokes about millennials and avocados attest), they are spending more time eating and drinking at home with friends, rather than out at restaurants, and – of course – they’re young. Capturing customers in their teens and twenties lays the path for decades of business as they mature.

Disclosure

Dominion holds Grubhub in its Global Trends Ecommerce Fund.


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