Amazon Could Take Stake In Food Delivery Platform Grubhub Under New Partnership

Amazon has been bullish on its food delivery expansion for a few years now. Back in 2019, it sought to build its own cost-intensive food delivery platform, but now it has adopted a new strategy.

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The Amazon and Just Eat Takeaway Partnership

Amazon and Just Eat Takeaway (JET), which owns Grubhub in the United States, recently announced an investment and partnership where the former would provide free Grubhub+ memberships to its Prime users for a year. It is estimated that Amazon could take up to a 15% stake, which roughly translates to hundreds of millions of dollars under this new partnership.

As per the details that surfaced post the big announcement, Amazon can choose a 2% stake in Grubhub for a minimal price or it can buy up to 13% of its shares at a formula-based price. This would be contingent upon how many new customers Amazon is able to direct towards Grubhub.

The deal is touted to drive significant adoption of Grubhub's subscription now that the service has easy and full access to Amazon's 200 million plus Prime users. This is a massive opportunity for the food delivery platform that had only 33 million total active users in April 2021.

"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. 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," said Adam DeWitt, CEO, Grubhub.

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