GrubHub probably isn’t eyeing a 2012 IPO, but there’s plenty of reason to keep an eye on this company. It has a strong business model, is making acquisitions and just completed a venture capital round good for $50 mn. The fact that it has a major (and successful) competitor in Seamless indicates that this is a big, robust market.
Here are five reasons GrubHub is worth your time:
1. It’s in a great sector: before the IPO market seized up in August, the sweet spot appeared to be consumer business and internet. LinkedIn, Zillow, HomeAway and Dunkin’ Brands had celebrated IPOs. TripAdvisor is set to go public this year, too. GrubHub sits squarely in both internet and consumer business.
2. The investors are smart: when you see a venture capital story on Inside IPO, the same names seem to keep coming up. A few of them are Lightspeed Ventures, Benchmark Capital and DAG Ventures. You know what? They all have stakes in GrubHub.
3. GrubHub is hungry: even though the company is relatively young, it hasn’t been shy about acquisitions. It’s most recent play was for Dotmenu. Other major start-ups that have gained some ground through acquisitions include Facebook and Twitter.
4. Traction counts: GrubHub is in big cities, such as New York, San Francisco and Los Angeles, and it has relationships with 15,000 restaurants already.
5. It won’t be first: for online food and dining, OpenTable is already publicly traded. Though its model isn’t exactly the same as GrubHub’s, but it’s close. And, it has a market cap of $1.1 bn (60X earnings).
Give GrubHub time. While 2012 isn’t likely to be the company’s big year, the time to start watching is now.
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