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As part of the agreement, Amazon has added Grubhub perks for Prime members who can now sign up for a free one-year membership of Grubhub+, which gives customers unlimited $0 delivery fees and other rewards and benefits.

Amazon agrees to stake in Grubhub parent company Just Eat Takeaway.com

A subsidiary of Amazon will have the option to take 2% or up to a further 13% of Just Eat Takeaway equity at an undisclosed price; Amazon announced added food delivery perks for Prime customers

Grubhub parent company Just Eat Takeaway announced a commercial agreement with Amazon in which the e-commerce giant has agreed to a small stake in Grubhub, with the option of taking over 2% equity stake or up to a further 13% equity stake in the food delivery company at an undisclosed "formula-based price," which would be based on specific external targets. In total, Amazon could claim more than 15% stake in Grubhub if they so choose. 

As part of the agreement, Amazon has added Grubhub perks for Prime members who can now sign up for a free one-year membership of Grubhub+, which gives customers unlimited $0 delivery fees and other rewards and benefits. Grubhub expects the partnership will expand Grubhub+ membership and improve 2022 earnings and cashflow.

“I am incredibly excited to announce this collaboration with Amazon that will help Grubhub continue to deliver on our long-standing mission to connect more diners with local restaurants,” Adam DeWitt, CEO of Grubhub, said in a statement. “Amazon has redefined convenience with Prime and we’re confident this offering will expose many new diners to the value of Grubhub+ while driving more business to our restaurant partners and drivers.”

According to the announcement, Just Eat Takeaway is exploring the partial or full sale of Grubhub, which could open the door to selling Grubhub to Amazon.  Both companies have redefined the culture of on-demand convenience for customers, especially during the COVID-19 pandemic. However, Grubhub's performance has slowed as of late with the company reporting a 5% decline in sales during the first quarter of 2022.

“With the new Grubhub and Amazon offering, Prime members now can enjoy free delivery from hundreds of thousands of restaurants across the country, when they sign up for a year of free Grubhub+,” Ariella Kurshan, senior vice president of growth, Grubhub, said in a statement. “I'm thrilled that new Grubhub diners from Amazon can get even more delivered to their door with their Prime membership."

This is not the first time Amazon has taken an equity stake in a food company: In 2020, SpartanNash issued a stock warrant to an Amazon affiliate that enabled the e-commerce giant to become one of the grocery distributor’s largest institutional shareholders.

Contact Joanna Fantozzi at joanna.fantozzi@informa.com

Follow her on Twitter: @JoannaFantozzi

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