Groupon appears to be readying itself to expand into food delivery and take on services like GrubHub. Today, the company announced its acquisition of food-delivery service OrderUp and detailed its plans to expand into the $70 billion sector.
Founded in 2009, the Baltimore-based OrderUp is live in 40 cities across the country, many of which are college towns. The service has processed over 10 millions orders in these markets to date.
In a news release, OrderUp CEO Chris Jeffrey said:
“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,” said OrderUp CEO Chris Jeffery. “We look forward to bringing the thousands of great restaurants that we feature to hungry Groupon customers across the country.”
For its part, Groupon sees this as an opportunity to better serve its 25 million customers across the country. “Online food ordering and delivery represents an untapped opportunity for Groupon and serves as a natural extension of our local marketplace,” Groupon CEO Eric Lefkofsky said in a press release.
“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.”
This purchase marks a major chance of expansion for Groupon, which has managed to maintain pretty stale product innovation over the past several years despite it being a public tech company with a multi-billion-dollar market cap.
If Groupon can use this deal to break the walls down and storm GrubHub’s food-delivery castle, it has the potential to eat into some of Yelp’s business as well.