On Thursday, Groupon, deals and coupons website acquired OrderUp, Baltimore food delivery startup for an amount undisclosed.
Founded in 2009, OrderUp is a food delivery startup that operates in Baltimore, Denver and many other places with students crowd like Bloomington, Ind. The company app on Android and iOS and network of drivers let customers get the food delivered at the doorstep from various restaurants closeby that do not offer the delivery service. Till date, it has processed more than 10 million delivery orders.
The recent acquisition gives Groupon, the Chicago-based startup known for its offers and discount coupons at local restaurants, an advantage to add food delivery to its offerings in around 40 cities where OrderUp has its network. Quite recently, Groupon has launched Groupon To Go, an online ordering platform that allows users to lookout in the closer area for food delivery or pickup, which is operating in beta testing phase for a small circle in Chicago, said Dan Roarty, SVP of Marketplace, in an email to Blue Sky.
“Online food ordering and delivery represents an untapped opportunity for Groupon and serves as a natural extension of our local marketplace,” said Groupon CEO Eric Lefkosky. “The potential in delivery and takeout is apparent – especially with the growth of mobile – and OrderUp’s operational ability, coupled with Groupon’s engaged customer and merchant base, bring tremendous scale to the space.”
“Groupon’s reach and ability to connect supply and demand at scale make it the perfect destination for us to grow even faster and expand in our targeted local markets, ” Jeffery said. “We look forward to bringing the thousands of great restaurants that we feature to hungry Groupon customers across the country,” he added.
Following the acquisition, OrderUp will continue functioning its Baltimore headquarters, a 15,000-sq.ft space at the Can Company in Canton and continue to operate as a separate brand. With the employee team of 80 in Baltimore and 50 in other places in USA, the startup raised $9 million in Series A funding round led by Revolution Ventures, last year.
Groupon which has been struggling to grow in the market in these recent years, food delivery could be a tantalizing alternative. In the first quarter of this year, Groupon’s move to shift awway from daily deal seems to have worked. Revenues generated was above the expectations of the analyst. But, Groupon’s stock has been on the fall for the last three months. Study by the analysts show that the stock has been undervalued and the reason behind it could be because Groupon made big promises of drastic growth in the forthcoming months and investors may be skeptical. Considering the current situation, Food Delivery could be a great way for Groupon to expand its business, specifically as OrderUp caters to market where the delivery options are limited.