[bsimpson]

Those weird ghost kitchen things have more than half a billion dollars to spend on acquisitions?!

I wonder how this came to be - did they already have that big of a war chest, or did they hear they could buy a name brand and go back to their investors to finance it?

[skywhopper]

Looks like they only spent $150M in cash and took on $500M of debt to do the ancquisition. They raised $250M from outside investors to pay for it. So sounds like they have $100M to try to make a go of it.

I expect the value to go way down as they squeeze all sides of the equation: drivers, restaurants, and customers.

[JumpCrisscross]

I’ll look up the addresses of restaurants on Uber Eats, using street view, before ordering. Most of them are at bodegas or otherwise non-restaurant spaces.

[Gormo]

I recently saw a new burger joint pop up on Uber Eats with an address not far from my home. It turned out to be the address of the last remaining Ruby Tuesday restaurant in my area, but the burger place did not advertise any connection to Ruby Tuesday. Seemed very sketchy to me.

[heroprotagonist]

A ton of places are doing that. Restaurants that want to price things differently from their main. Or primarily in-store restaurant chains that don't want branding impacted by crappy delivery reviews. Keyword competition to improve sales. Menu, naming, picture, process experimentation. Additional placement in search results with different ranking. Bad review evasion. Limiting blast radius of bad reviews (eg, they still have a second high-rated listing for those X months they get less orders until a spat of negative reviews expire).

Basically, 'cheating' because it's not very honest, or can also be putting in extra effort to sell more and/or limit risk.

[Gormo]

The way you put it doesn't sound like almost the mirror-image of the whole "ghost kitchens" thing. If established, reputable restaurants with known food quality are operating unde alternative branding in order to experiment with new marketing strategies, it doesn't really seem like 'cheating' to me.

Definitely not in the same category as a fly-by-night operation in a warehouse pretending to be an established restaurant.

[heroprotagonist]

Agree, it's all in how it's actually used. There are ghosts kitchens renaming themselves to avoid bad reviews, or to inflate their presence. But there are legit reasons to do it too.

[carabiner]

https://en.wikipedia.org/wiki/Virtual_restaurant

Also chuck e cheese, tgi fridays run these.

[jjeaff]

Denny's has two or three different brands they will advertise as different restaurants in a single area.

[snarf21]

I see this is as simply buying scale more quickly than they could grow organically.

[skizm]

Apparently they have totaled ~$1.7B in funding according to Bloomberg:

> Lore’s startup also raised $250 million in equity investment, bringing the total amount of capital it’s secured to $1.7 billion

[xyst]

They don’t have jack shit. It’s all based on hype, keep the train rolling so the early investors can get their cut while the other suckers hold the bag

[akudha]

I suppose these career options have relatively much higher chances of making good money:

1. Become a corporate lawyer, charge by the hour - win or lose, lawyers get paid

2. Run a soulless media company - rake in the ad dollars from both parties (during elections) and other soulless companies spending VC money on advertising (all the time)

3. Be early investor, pump and dump

[KoftaBob]

They've raised $1.9B in funding over 6 funding rounds. How? Because their founder is Marc Lore:

> Lore was the CEO and co-founder of Quidsi, the parent company of a family of websites, including Diapers.com. Quidsi was sold in 2011 to Amazon for $545 million.

> Lore was appointed in September 2016 to lead Walmart's e-commerce division when his company Jet.com—an e-commerce website launched in 2014—was acquired by Walmart, Inc. Walmart purchased Jet for $3.3 billion.

https://www.crunchbase.com/search/funding_rounds/field/organ...

[refulgentis]

IMHO it's sort of the inverse*: its not that weird ghost kitchen things have $500 mil for acquisitions, its that Marc Lore has enough salesmanship to get private capital to lend $100M to get a turnkey delivery business for his food entrepreneurship, and the banker loans can pretty it up to sound like $600M, and the decision makers at GrubHub get a mildly-embarrassing outcome instead of an extreme outcome. (shutdown)

* I know a decent amount about finance, but don't practice it daily enough to find it second nature. I'd appreciate a similarly colloquial perspective from someone who reads me as naive.

[mgiampapa]

I think that future loosening of the credit markets due to political factors is also playing a roll. By the time the runway is spent they may expect to be in a very different market so buying scale now is the move.

[philip1209]

Grubhub has revenue, which means they might be able to finance the acquisition with debt.

[tootie]

I have a bad feeling about Wonder. One opened near my office and had a load of free meal promotions and it was packed. A few weeks later it went very quiet. I had a few meals and they were decidedly meh. The promise of ordering options across a dozen different cuisines is appealing but not when all of them are underwhelming.

[that_guy_iain]

They raised 250m and spent 150m cash on GrubHub with 500 in debt.