UPDATED 16:06 EDT / SEPTEMBER 20 2011

Food Search Engine GrubHub Raises $50M, Buys Dotmenu

Chicago-based startup GrubHub, the web and mobile search engine service that offers online ordering for delivery and pick up, has raised another $50 million in a Series E funding round. The company, which raised $11 million in venture capital earlier this year, announced today that it has acquired New York-based food delivery network Dotmenu, the parent company of Campusfood and Allmenus.

The company raised the capital through funding led by Lightspeed Ventures with Mesirow Financial, Greenspring Associates, Benchmark Capital and DAG Ventures participating.

Dotmenu is a privately owned company founded by Michael Saunders and is one of the largest food delivery networks (with a presence in over 300 markets in the US), with more than two million registered users.  GrubHub has a network of more than 13,000 restaurants in the US cities for food delivery services.  GrubHub’s online and mobile apps connect thousands of users for order delivery or pickup.

The acquisition will make GrubHub the largest restaurant listing platform in the US, with more than 250,000 restaurant menus spread over 50 major cities and college campuses across the nation.  The company plans to extend the online ordering of food for delivery and pick up through Dotmenu’s restaurants.  Both the companies will concentrate more on the business through mobile service apps as Matt Maloney, the founder of GrubHub, predicts mobile orders to make up 20 percent of the total food sales by the end of 2011.

As per a report from Google, queries related to coupon-based searches have increased by 280 percent between 2009 and 2011.  Google says companies are using more local search data for online marketing experience.  This results the search engine giant to enter the restaurant space and to make a deal with Zagat, the online provider of user-generated content, trusted and accurate restaurant ratings.

Google plans to acquire the company for an estimated amount of $100 to $200 million. Zagat recently launched a group-buying program along with DealOn called Zagat Exclusives, which will offer regular discounts at Zagat-rated restaurants. Last year, Microsoft also integrated the mobile version of Bing with restaurant services OpenTable and GrubHub.


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