and Company Background
In today’s fast-paced world, convenience reigns supreme. We want everything at our fingertips, available at a moment’s notice.
One company that has taken this trend to heart is Just Eat. Just Eat is a UK-based online food delivery marketplace with customers across the world.
In this article, we will explore the ins and outs of this rapidly expanding company, starting with its history and ending with its business model. What is Just Eat?
Just Eat is a platform that connects customers with their favorite restaurants. Through its easy-to-use website and app, customers can browse menus, place orders, and have their food delivered straight to their doorstep.
Founded in 2001, Just Eat is now available in over 24 countries worldwide and has partnered with more than 140,000 restaurants.
Company History
Just Eat was founded in 2001 by Jesper Buch and five other entrepreneurs in Denmark. Initially, the company focused on providing restaurant reviews and takeout menus online.
However, in 2003, Just Eat pivoted to its current business model, focusing on online food ordering. In 2011, Just Eat went public and raised over 360 million in its initial public offering.
Since then, the company has continued to expand both organically and through acquisitions. In 2020, Just Eat merged with Takeaway.com in a 6 billion deal.
Just Eat’s Business Model
Three-sided Online Marketplace
Just Eat operates as a three-sided online marketplace, connecting buyers (customers), sellers (restaurants), and drivers (delivery partners). Customers can use the Just Eat app or website to browse menus and place orders from various restaurants in their area.
The restaurants receive orders via the Just Eat platform and prepare the food. Finally, the delivery drivers pick up the food from the restaurant and deliver it to the customer’s doorstep.
Expansion and Diversification
More recently, Just Eat has been expanding beyond its core business. In addition to partnering with restaurants, the company has also started working with grocers and warehouses.
This move aims to diversify the company’s revenue streams and tap into new areas of growth. Through partnerships with grocers, Just Eat aims to bring groceries, household goods, and other essential items to customers’ doors.
Similarly, the company has also partnered with warehouses to provide same-day delivery of larger items.
Conclusion
Just Eat is a prime example of a company that has recognized the importance of convenience in today’s world. Through its easy-to-use platform, the company has made it simple for customers to order food from their favorite restaurants and have it delivered straight to their doorstep.
While Just Eat started as a restaurant delivery platform, the company has since expanded to work with grocers and warehouses, diversifying its revenue streams and tapping into new areas of growth. With its continued expansion and innovation, Just Eat is poised to be a major player in the world of online marketplaces.
How Just Eat Makes Money
Founded in 2001, Just Eat is a prominent name in the online food delivery space, known for connecting customers with their favorite local restaurants. However, providing a user-friendly platform for placing orders is not the only way Just Eat makes money.
In this section, we will explore how Just Eat generates its revenue through different streams.
Restaurant Commissions
The primary source of revenue for Just Eat is the commission it receives from restaurants for each order facilitated via its platform. When a customer places an order through the Just Eat platform, Just Eat charges the restaurant a commission fee that is a percentage of the order value.
Usually, the rate ranges between 10% to 30%. According to Just Eat’s annual report of 2020, the company’s primary revenue stream was orders, with commissions from restaurants contributing to 89.6% of the company’s total revenue.
Delivery & Service Fees
Along with restaurant commissions, delivery and service fees are additional sources of revenue for Just Eat. Delivery fees are paid by customers, and Just Eat takes a percentage of it.
For example, a customer who orders food worth 20 might pay an additional 2 to 3 for delivery, and Just Eat charges up to a 30% commission on that delivery fee. Additionally, the company has implemented service fees in some locations, where customers are charged a set percentage of the order value based on the restaurant’s location and the order total.
According to Just Eat’s annual report of 2020, delivery fees and other income contributed approximately 10.4% of the company’s total revenue.
Sponsored Placements
Just Eat also generates revenue through sponsored placements. These are advertisements that restaurant partners can purchase to elevate their visibility on the Just Eat platform.
Sponsored placements pop up at the top of search results or other relevant page locations, making it more likely for the customer to choose that restaurant, thereby generating higher sales. Sponsored ads can increase a restaurant’s revenue by 50% or more.
Merchandise & Packaging Sales
In addition to food and delivery, Just Eat also offers merchandise and packaging to its restaurant partners, which generates additional revenue. The company offers branded packaging, such as delivery bags, napkins, cutlery, and cups, to restaurants to ensure a uniform customer experience.
This stream of revenue may not be significant but continues to add to the company’s total earnings.
Interchange Fees
As a payment processor for all transactions made on its platform, Just Eat earns revenue in the form of interchange fees. These fees are a small percentage of the transaction value that the company charges its restaurant partners for processing payments.
Just Eat Funding, Revenue &
Valuation
Funding and Investment
Since its inception, Just Eat has raised significant amounts of funding, predominantly through equity offerings and initial public offerings (IPOs). In 2020, Just Eat went through a significant merger with Takeaway.com, an order aggregator company based in the Netherlands.
The all-share merger was valued at approximately 5.8 billion, making it one of the most significant deals in the food delivery industry.
Revenue and Growth
Just Eat has seen substantial growth in recent years, with continuing investments to expand its footprint in new and existing markets. In 2020, the company reported revenue of 2.4 billion, a 54% increase from the previous year.
Furthermore, the company reported that the COVID-19 pandemic had a positive effect on its financial performance, with revenue further increasing towards the end of the year.
Valuation
Following the merger with Takeaway.com, Just Eat’s current market capitalization is approximately 12.1 billion. The company’s growth trajectory has contributed immensely to its valuation over the years, with the successful expansion into new markets such as Australia, Canada, and Brazil.
Conclusion
Just Eat’s primary source of revenue is restaurant commissions, followed by delivery, service fees, sponsored placements, merchandise sales, and interchange fees generated through payments processing. With the growth potential in the online food delivery industry, Just Eat has managed to secure substantial funding and has seen impressive revenue growth in recent years.
Its merger with Takeaway.com has further contributed to its valuation, with the company’s market capitalization currently sitting above 12 billion. In conclusion, Just Eat is a leading online food delivery marketplace that generates its revenue from several streams, including restaurant commissions, delivery and service fees, sponsored placements, merchandise, packaging, and interchange fees.
The company’s focus on convenience has fueled its significant growth, leading to successful expansion into international markets. With its recent merger with Takeaway.com, Just Eat’s market capitalization now sits above 12 billion.
Just Eat’s success in the online food delivery industry highlights the rising demand for convenient and accessible services, and the company’s diversification into other areas shows its potential for future sustained growth.