Groupon wants to be your source for local commerce, and it's diving even further into a highly-competitive category: food delivery.
Groupon announced a new partnership Monday with fellow Chicago-based tech giant Grubhub on a deal that allows Groupon users to order food delivery from Grubhub’s 55,000 U.S. restaurant partners via Groupon. The partnership will also let customers redeem Groupon deals when they order Grubhub delivery with Groupon. Terms of the partnership were not disclosed.
Groupon first launched a food delivery effort in 2015 when it bought delivery company OrderUp. Groupon officially rolled out Groupon To Go, its own restaurant delivery service, later that year. By the fall of 2016 Groupon to Go was servicing Chicago, Denver and St. Louis.
The Grubhub partnership will now allow Groupon to reach food delivery customers in more than 1,100 cities, the companies said in a press release.
In addition to the partnership, Grubhub is acquiring certain assets in 27 company-owned OrderUp food delivery markets from Groupon, according to a news release. Grubhub will now also power food delivery for the company's Groupon To Go markets.
A spokesman for Groupon added that the company has retained 11 OrderUp franchise markets, as well as the OrderUp brand, tech and intellectual property.
"We're thrilled to join forces with Grubhub to vastly expand the number of food delivery options available through our marketplace," Groupon CEO Rich Williams said in a statement. "This partnership connects two of the biggest players in local commerce and is a win for both consumers and restaurants by providing people with more savings and access to the food they want, when they want it."
Groupon and Grubhub's share were up 1.3% and 3.5%, respectively, in after-hours trading following the news.
Image via Groupon
