Just Eat Writes Down Grubhub Valuation by $3.1B on Order Declines

Food delivery giant Just Eat Takeaway wrote down the value of its U.S.-based division Grubhub by 3 billion euros ($3.1 billion) as record-high inflation continues to constrain household budgets and food delivery companies overall take a hit.

Total orders on its platform decreased 6.8% from the same period a year ago to 509.4 million, according to a press release on Wednesday (Aug. 3). The company’s biggest region, North America, saw the largest hit, with orders falling off by 20 million in the first half of this year after setting records in the first six months of 2021.

See also: Just Eat Takeaway Mulls Multibillion Hit to Unload Grubhub

Overall, the London-listed firm lost 112 million pounds in the first six months of 2022 as order numbers dropped 7% compared to 2021 while the value of each order fell 3%. The U.K. and Ireland performed worse than other European regions with a 13% drop over last year, according to the release.

Just Eat said the write-down of Grubhub resulted from “the reduction in sector valuation comparables” combined with the impact of rising interest rates and market volatility.

“After a period of exceptional growth, Just Eat Takeaway.com is now two times larger than it was pre-pandemic. Whilst this growth required significant investment, we have continued to focus on executing our strategy to build and operate highly profitable food delivery businesses,” said Jitse Groen, CEO of Just Eat Takeaway.com.

“Our three largest segments, representing 90% of our Gross Transaction Value, were Adjusted EBITDA positive in the second quarter of 2022. Our path to profitability is accelerating and we expect to continue to materially improve our Adjusted EBITDA in the second half of this year and to be Adjusted EBITDA positive at a Group level in 2023,” Groen said.

Read more: Amazon’s Budding Grubhub Partnership Could Grow to 15% Stake

Just Eat Takeaway announced in July that partnered with Amazon to let Amazon Prime customers order from Grubhub without a fee for a year to boost new customers. In exchange, Amazon would get a 2% stake in the food delivery company that could balloon to 15% if Grubhub gained customers, PYMNTS reported.