GrubHub’s Official IPO Filing Suggests a Company With an Appetite

Watch out, and Eat24. GrubHub is going public (ticker: GRUB), and in its official regulatory filing it hints at a hunger for smaller competitors as well.

Companies providing delivery services to independent restaurants have already been joining forces. Most notably, GrubHub teamed with Seamless in August. While the deal was called a merger at the time, government filings now describe it as GrubHub acquiring Seamless, and the companies have officially dropped the awkward moniker they’d been using for the past few months: GrubHub Seamless. Seamless, however, will continue to exist as a separate brand.

Before the deal, GrubHub bought Dotmenu, which owned Campusfood and Allmenus, and Seamless bought MenuPages. The combined company’s market power drew the ire of New York’s attorney general, who last summer forced GrubHub and Seamless into an agreement intended to ensure that the partnership doesn’t enjoy an unfair advantage in Manhattan.

GrubHub, which operates the online delivery software for restaurants, is by far the largest in its cohort of delivery middlemen. The company works with about 29,000 restaurants and brought in $137 million in revenue on $1.3 billion in gross food sales last year. But as it’s grown, GrubHub has become less profitable. In 2013 its profit was less than half what it was two years earlier, and its technology and operational costs are growing faster than its revenue.

The challenge for GrubHub will be maintaining growth in the years ahead. As investors decide whether it’s a good deal in the next several months, GrubHub is also reminding them about the seasonality of its business. Starting in April and May, the company will hit its low season, when people decide to go out instead of ordering in, and college campuses clear out entirely. Companies including Macy’s, Best Buy, and Barnes & Noble have been complaining about the harsh winter. Not GrubHub.

Another storm is predicted to hit the East Coast in the coming days, which is already prompting a round of groans from food delivery customers. But you can bet GrubHub executives are smiling.

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