SAN FRANCISCO—Major food delivery firms are looking for funding through IPOs and mergers, the Wall Street Journal reports. Postmates, DoorDash and Uber Eats have been talking about mergers, but no deals have been forged yet. DoorDash and Postmates also are considering going public, while Grubhub is interested in potentially buying another food delivery company.
In the United States, the growth of food-delivery operations has exploded over the past five years. Delivering food is expensive, and American food delivery companies have experienced fierce competition amid plummeting customer loyalty. DoorDash, Grubhub, Postmates and Uber Eats boast they now can deliver to three-fourths of the U.S. population. “You have competitors in every market now,” said Adam Price, former CEO of Waitr Holdings, a delivery company.
DoorDash is the largest U.S. delivery firm with 37% of market share, while Grubhub nabbed the second place with a 31% market share. “By midyear, I believe there will be more clarity in our industry,” said Matt Maloney, CEO of Grubhub. “Investors are looking for more profits. … The longer these unprofitable models execute, the more money they are draining, and the less runway they have.”