Five Questions for GrubHub, a Company Hungry for Growth

Online food ordering has established itself as a viable business model, packed with potential for growth. GrubHub proves it. Based in Chicago, GrubHub is a venture-backed company founded in 2004 by software engineers Matt Maloney and Mike Evans. In September 2011, the company raised $50 million in venture funding in a round led by Lightspeed Ventures with Mesirow Financial, Benchmark Capital, Greenspring Associates and DAG Ventures participating. But the company made bigger news when it acquired DotMenu, another online food ordering and delivering service with an extensive following by college-aged users. Six months ago, the company raised $20 million and the company says it is already profitable which is all the more surprising because users do not pay any service fees (although restaurants do pay a commission). Susanne Dawursk, brand marketing director for GrubHub took some time to answer a few questions from Benzinga about GrubHub, its expansion and future in mobile ordering.

The website shows consumers all of the local restaurants that deliver to them and allows diners to order directly online, by phone or through the GrubHub iPhone and Android app. Both apps are free from their respective app markets, and it is also free for diners to order online at GrubHub.com. GrubHub currently serves Chicago, New York, Los Angeles, San Francisco, Boston, Philadelphia, Washington D.C., San Diego, Oakland, Seattle, Portland, Denver, Boulder, Miami, Dallas, Fort Worth, Houston, and Phoenix, with plans to add more cities in the immediate future. In other words, watch out.

The acquisition of Dotmenu – home to both Campusfood.com and Allmenus.com – allows us to accelerate GrubHub's current growth and solidify our position as the leading online ordering company in the U.S. by increasing our overall number of markets and the number of restaurants a diner can order from online and through mobile applications. In purchasing Campusfood, we have acquired the leading online ordering website for the collegiate market. We see this as a great opportunity to develop the GrubHub brand with this audience as most college students move to major metropolitan areas upon graduation where GrubHub is the market leader. Allmenus is the leading menu directory in the U.S. with over 230,000 menus listed on the site. It's a great site with a significant amount of traffic and great content. We are thrilled by the opportunity this presents.

GrubHub's mobile strategy simplifies the connection between hungry consumers on the go and restaurants. We want our mobile channel to be as feature rich as our consumer website and to take full advantage of mobile specific functionality. Our focus is iPhone, Android, HTML5 Mobile Web Browsers and Tablets, iPad and Android Based. The evolving mobile space and technologies make it a rich environment for experimenting with innovative ideas. People want to order from wherever they are. So, if you're at a friend's house, you don't want to have to borrow their computer when your phone is in your hand. Also, when you're on your way home, you can go order so the food gets there when you get home and not have to wait. With our apps, our users can now save credit card information and leave their wallet at home or not even have to get off the couch to pay for their food. Our mobile apps really simplify the ordering process.

Over the past 6 months alone, the company has seen a 300% increase in its mobile app install base. After launching our updated iPhone app in October 2010, we saw a 330% increase in mobile food orders. Mobile orders comprised of 1 percent of our total revenue in 2009. With the growing popularity of our mobile apps, mobile orders comprised of 10 percent of our sales by the end of 2010, roughly $7 million. We project mobile orders to make up 25% of our total food sales by the end of 2011.

GrubHub will continue to evaluate opportunities to expand our services more aggressively to our restaurants and diners. Our strategy continues to be about scaling our business to bring more orders to delivery and takeout restaurants across the country. We're focused on being the best we can be – our diners deserve that.