Amazon enters agreement with Grubhub, offers food delivery to Prime customers

Amazon entered an agreement Wednesday that could see them investing in Grubhub in a deal that would see the expansion of food delivery benefits to their customers.

Under the agreement, Amazon will receive warrants over 2% of Grubhub’s fully-diluted common equity with an option to increase it to 15% if more customers are signed up for the program. 

“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.” Grubhub CEO Adam DeWitt said.

The deal will allow Amazon Prime members to take advantage of a Grubhub+ membership. This includes unlimited no-fee deliveries and increased access to rewards through the Grubhub app.

“The value of a Prime membership continues to grow with this offer, and this year is shaping up to be a great time to enjoy the convenience, savings, fun — and deliciousness — that membership provides.” Amazon Prime executive Jamil Ghani said. 

This is not the first time Amazon has stuck its toe in the food delivery market.

---

SEE ALSO: Sens. Warner, Rubio urge FTC investigation of TikTok over ‘repeated misrepresentations’

---

In 2019, Amazon acquired a stake in the UK food delivery company Deliveroo, allowing them to provide food delivery to Prime customers in the United Kingdom with no extra fees.

News of the deal sent stock prices for Grubhub competitors tumbling, but the partnership with Amazon comes after a punishing year for Just Eat Takeaway, which has seen its own value sink some 60% in a post-pandemic slowdown.

Correction: A previous version of this story incorrectly reported that Amazon claimed a 2% stake in Grubhub. Amazon has the option to invest but has not currently done so.