Yelp Gobbles Up Eat24 For $134 Million to Boost Transactions

Yelp has acquired food ordering partner Eat24 in a transaction valued at $134 million (cash and stock). Yelp said in a blog post, “We believe that the acquisition of Eat24 will allow us to build a better, more seamless ordering experience for consumers that we can grow through 2015 and beyond.”

Restaurants is the top local search category consistently, but historically has not generated ad revenues to match that status. In Yelp’s Q4 earnings the company said the following about the distribution of its revenues by category:

  • Home & Local: 26%
  • Restaurants: 15%
  • Beauty & Fitness: 13%
  • Shopping: 11%
  • Health: 11%
  • Other: 24%

The acquisition of Eat24 comes roughy a year after Yelp moved into transactions with Yelp Platform and third party partnerships. Eat24 was one of those partners.

According to the press materials, “Eat24 provides approximately 20,000 restaurants in over 1,500 cities nationwide with the ability to offer online delivery and takeout services.” Yelp is raising guidance following the news: 

For the first quarter 2015, Yelp is increasing its revenue outlook and expects net revenue to be in the range of $118.5 million to $120.5 million. Adjusted EBITDA is still expected to be in the range of $19 million to $21 million.

Thus Eat24 helps Yelp with revenue and to diversify revenue. But it also reflects a number of trends:

  • Marriage of online and offline commerce: e-commerce transaction followed by offline fulfillment
  • Deeper move into bookings/transactions as a consumer site
  • Further move into operational services for SMB customers and beyond pure marketing/advertising

This is part of a broader evolution of the local market, widely developing what are now being (unfortunately) called “on-demand” services. HomeAdvisor’s recent adoption of “instant booking” is another example of the trend.

Leave a Reply

(Comment Guidelines)



First Name

Last Name

Company Name

Email Address