New York City-based online food ordering service Seamless, born SeamlessWeb during the dotcom boom in 1999, has purchased Menupages from New York magazine publisher New York Media. According to Betabeat’s sources, the acquisition price was $15 million. New York Media Holdings CEO Anup Bagaria, who would not disclose the price but said it was “significantly more than we bought it for,” told us that the terms of the deal give New York Media the right to continue to sell advertising against Menupages content for the next year. Mr. Bagaria said the reason for selling MenuPages, which “has actually grown a 100 percent since we’ve purchased it” in 2008, had to do with New York Media’s reluctance to invest in growing the business beyond advertising revenues.
For Seamless, the MenuPages acquisition is the latest in a string of aggressions spurred by fierce competition in an increasingly-heated market. Seamless has maintained a serviceable, but increasingly stale product after it was bought by corporate caterer ARAMARK in 2006. But after years of complacence, Seamless is going after the consumer and residential ordering with renewed vigor. In June, the company announced a $50 million investment that would give the PE firm Spectrum Equity Investors a minority stake in Seamless, which has since then been operated independently of ARAMARK. Seamless’s fiercest competition comes from GrubHub, a seven-year-old Chicago upstart that completed a parallel purchase last week: the acquisition of Dotmenu, owner of online ordering site CampusFood and menu library AllMenus.
Mr. Bagaria says the decision to sell occurred at the end of the first quarter of 2011 when an undisclosed buyer approached New York Media with an offer for MenuPages. The unsolicited offer could have come from a long list of related companies, but Betabeat’s sources think was most likely either Zagat, which was exploring the possibility of adding menus to its reviews before it was acquired by Google; or the London-based Just-Eat, which raised $48 million to expand globally around the same time.
The offer inspired New York Media to find out who else might be interested. By the time the publisher was done, a source familiar with the situation says, it had spoken to Google, the publicly-traded reservation service OpenTable, Just-Eat–and GrubHub, which ultimately passed. “We couldn’t come to an agreement on price,” GrubHub CEO and co-founder Matt Maloney said. However, one source points to the timing of GrubHub’s Dotmenu acquisition, which was likely already in the works.