Yelp Buys Eat24, Expands Into Online Food Ordering

U.S. online food-ordering service Eat24 was started by two Israelis in San Francisco.

Subrat Patnaik and Sai Sachin R
Screenshot fro Eat24's Super Bowl commercial.
Screenshot fro Eat24's Super Bowl commercial.
Subrat Patnaik and Sai Sachin R

REUTERS - Yelp Incorporated said it bought the U.S. online food-ordering service Eat24, which was started by Israelis Nadav Sharon and Haim Erez in apartment seven years ago.

Faced with maturing growth in the United States, Yelp has been stepping up efforts to expand in international markets, but without much success. The acquisition will expand its business beyond consumer reviews into one of the hottest sectors of the online economy.

Growth in average monthly unique visitors to Yelp's website,, and its related app slowed to 13 percent in the December quarter from 39 percent a year earlier.

The acquisition of Eat24 for $134 million puts Yelp in direct competition with established operators such as market leader GrubHub Inc, whose shares have risen about 50 percent since the company went public in April.

B Riley & Co analyst Sameet Sinha said Eat24 has a 6 percent margin on an EBITDA basis, compared with GrubHub's 30 percent.

"So there's room for growth there," he said, adding that Yelp can Eat24 improved exposure through its site.

Yelp shares were up 6.5 percent at $44.88 in afternoon trading on the New York Stock Exchange.

Matt Maloney, GrubHub's chief executive and co-founder, has estimated the size of the U.S. online food delivery market at $70 billion. "..."We didn't even process $2 billion in 2014," he told Reuters in an interview last week.

GrubHub bought restaurant delivery service DiningIn last week and said it would buy another delivery firm, Restaurants on the Run. GrubHub currently only connects restaurants to hungry customers. It's up to the restaurant to deliver.

Yelp paid $75 million in cash and about 1.4 million Class A shares for San Bruno, California-based Eat24.

Eat24 offers online delivery and takeout services to about 20,000 restaurants in more than 1,500 cities in the United States.

In a Super Bowl commercial featuring Snoop Dogg and actor Gilbert Gottfried, the rapper touts Eat24 as a way to help people from becoming "Hangry."

The company says its three most popular searches are "Dominos", "Pizza Hut" and "Taco Bell".

Reflecting the Eat24 purchase, Yelp raised its revenue forecast for the current quarter to $118.5 million-$120.5 million from $114 million-$116 million.

It also increased its full-year revenue forecast to $574 million-$579 million from $538-$543 million.

Analysts on average were expecting revenue of $115.7 million for the quarter and $542.8 million for the full year, according to Thomson Reuters I/B/E/S.



Automatic approval of subscriber comments.

$1 for the first month

Already signed up? LOG IN

Rep. Henry Cuellar attends a campaign event on Wednesday, in San Antonio, Texas.

AIPAC-backed Dem Declares Victory Against Progressive Challenger in Texas Runoff

Iranian President Ebrahim Raisi and Atomic Energy Organization of Iran chief Mohammad Eslami at an event for Nuclear Technology Day in Tehran, last month.

Prospects for Reviving Iran Nuclear Deal 'Tenuous' at Best, U.S. Envoy Says

A family grieves outside the SSGT Willie de Leon Civic Center following the mass shooting at Robb Elementary School in Uvalde, Texas on Wednesday.

Israeli PM Offers Condolences After Texas Gunman Kills 21 at Elementary School

U.S. President Joe Biden, this week.

Biden Decides to Keep Iran's Revolutionary Guards on Terror List, Says Report

ADL CEO Jonathan Greenblatt.

Progressive Jews Urge ADL Chief to Apologize for Calling Out Democratic Activist

Democratic Sen. Bernie Sanders with Jessica Cisneros in San Antonio last week.

It’s AIPAC vs. Bernie Sanders in Too-close-to-call Texas Democratic Runoff