July 18, 2015
Groupon recently went under the radar with the beta launch of Groupon To Go. This new food delivery platform from Groupon was partially made possible with the acquisition of Baltimore based delivery startup OrderUp.
OrderUp, which was founded in 2009, is a major competitor in the food delivery space. However, unlike Grubhub, they focused more on smaller communities, primarily college towns. Since its launch, OrderUp has processed over 10 million orders.
Groupon to Go works much like other food delivery services, in that it allows, customers to order food nearby for delivery or pickup. It is currently still in beta Groupon to Go currently operates in beta and is available to a small percentage of Groupon customers in Chicago.
“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 Lefkofsky in a statement. “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.”
So what does this acquisition mean for OrderUp? Well, most of their employees will move over to Groupon, but the company will still maintain their headquarters in Baltimore and still be a stand alone brand. Groupon will simply promote OrderUp through its own marketplace which currently has a reach of about 25 million users throughout the North America.
“This deal is about combining operational capabilities with significant customer scale. Even the current leaders in this category lack Groupon’s active customer base and reach,” said Dan Roarty, Groupon’s SVP of Marketplace, in an email to Blue Sky. “Takeout and delivery is one of the obvious use-cases for local commerce, and no one does local better than Groupon.”
About a year ago, OrderUp raised raised a $7 million in a Series A round led by Steve Case’s Revolution Ventures, with participation from LivingSocial cofounder Tim O’Shaughnessy.
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