Amazon will Invest in Just Eat Takeaway’s Grubhub

Amazon has announced that it is going to buy 2 percent stake in Grubhub. And US Prime members will not have to pay any service fee for 1 year. This announcement has been made in July Prime Day.

Shares of Just Eat Takeaway were down as much as 70% this year. But as soon as the deal was announced, its shares rose up to 16%.

Just Eat Takeaway is a Dutch multinational online food ordering and delivery company. This company is formed by merging with London based just eat.

Whereas Grubhub is an American online food ordering and delivery platform. Its head quarter is in Chicago. This company has been bought by Dutch company Just Eat Takeaway.

Grubhub Plus membership is $9.99 per month. While the cost of Amazon Prime membership is $139 per year. Customers will be able to order from restaurants without any delivery charges.

Prime members will have to sign up with the Grubhub service. But it is only for one year. Grubhub’s delivery fee will be applicable after 1 year. Grubhub has a market value of $7.31 billion.

If Grubhub performs well so after this Amazon will buy up to 15% of its stake. Grubhub needed this investment very much. After this investment, it will help a lot in its growth.

Grubhub controls 11% of sales in the US. While DoorDash is at 57% and Uber Eats at 31%. Grubhub is way behind in this. Grubhub is also facing lawsuits in Chicago and Massachusetts.

Grubhub is also accused of deceptive practice. In which advertising delivery services are included without the consent of the restaurants. However, Grubhub has vehemently denied all these allegations.

Amazon issued a statement saying that, this deal makes Amazon Prime Membership even more valuable. Amazon has 200 million prime members world wide. While most of them are from America.

Amazon’s stake is in the form of warrants. Everything will depend on how the partnership is performing. How many new customers have Joined, only after this Amazon will think of investing further.

Just Eat Chief Executive Officer Jitse Groen is under pressure to find a way to reignite growth after a slew of competitors took market share and restaurants that had been closed during the Covid 19 Lockdowns reopened to diners.