• Platforms are powering a new era of on-demand meal delivery. Independent restaurants and fast-food chains have historically relied on dining in, pickup, and phone-based orders. But new tech companies are providing the platforms for restaurants to build a robust online delivery and ordering system. 
  • There is a massive unfulfilled market opportunity. As of 2015, about $210 billion worth of food is ordered for delivery or takeout on an annual basis in the US, according to Morgan Stanley Research. Just $11 billion of that is online delivery, and within that subsection, nonpizza online deliveries are worth just $4 billion in annual order volume. This means the market is underpenetrated but massive, which will incentivize continued competition and, potentially, an influx of new entrants.  
  • There are three main business models that companies adopt. The dominant business model so far has been platform aggregators whose primary function is to support online orders. These include Grubhub/Seamless and Eat24, which control a combined 66% share of the market so far. Other models include delivery-focused logistics models and full-service models in which companies cook the food themselves. 
  • Platform aggregators like Grubhub are in the most advantageous position. Grubhub benefits from a market-leading share at 59% and has an invaluable asset in its network of 45,000 existing restaurant partners across 1,000+ US cities. Meanwhile, other companies will face challenges as Grubhub focuses more on proprietary delivery services that could box out logistics firms like Postmates and DoorDash.  
  • There are a number of risks that all players in the ecosystem will have to navigate. SpoonRocket, a once promising full-service delivery provider, shut down earlier this year in the face of insufficient capital and intensified competition. This, along with cooling deal volume, could signal upcoming consolidation in the industry. Other risk factors include consumer resistance to delivery fees and lowering take rates, which measure the revenue a company actually earns out of the volume they process. 


Pizza chains have long dominated meal delivery, but digital platforms are now enabling the entire restaurant industry to plug into online delivery. In the dominant on-demand meal delivery model, platforms like Grubhub serve as a middleman that connect people to food using the scalability of the internet. Their platforms tap into a network of thousands of local restaurants, enabling these restaurants to expand their addressable audience [...]