Groupon Buys OrderUp, Taking On GrubHub in Food Delivery

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Groupon Inc. acquired OrderUp, an on-demand online and mobile food ordering and delivery marketplace, a move that further diversifies the company away from its origins as a daily deals site and pits it against the likes of GrubHub Inc.

OrderUp offers services in almost 40 markets in the U.S., mostly outside top metropolitan areas, and has processed more than 10 million orders, Groupon said Thursday in a statement. Terms of the purchase weren’t disclosed. Groupon climbed on the news, and rose 3.4 percent to $5.17 at the close in New York.

The deal is part of Groupon’s strategy to shift from promoting daily deals to engaging in broader e-commerce. Over the past several years, the company has begun offering services ranging from check-out tablets for merchants to a loyalty program and coupons. The company has added many of these functions through acquistions.

Groupon will compete with the likes of GrubHu as well as Google Inc. and Inc., which now offer grocery delivery, same-day package arrival and limited takeaway food offers.

“Online food ordering and delivery represents an untapped opportunity for Groupon and serves as a natural extension of our local marketplace,” Chief Executive Officer Eric Lefkofsky said in the statement.

Groupon’s shares hit a 52-week low in early July, and they are down 37 percent this year, as investors worry about competition and the company’s future growth.

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