Just Eat is an online food delivery service that allows users to choose from more than 580,000 restaurants, cafes, or takeaways across 24 countries.
Just Eat makes money via restaurant commissions, delivery charges, service fees, sponsored placements, packaging, merchandise sales, and interchange fees. The business operates under the model of a marketplace-based business where it introduces customers to businesses available to order from.
Established in the year 2000. Just Eat successfully merged with Takeaway.com which resulted in the massive growth to become one of the biggest food delivery services.
The platforms of Just Eat are accessible by accessing the appropriate websites or downloading one of its mobile apps (available for Android as well as iOS phones).
Business Model of How Just Eat Makes Money
Let’s get into the finer details of how exactly Just Eat makes its money which enables them to grow faster each year.
Just Eat makes money via restaurant commissions, delivery charges, service fees, sponsored placements, packaging, merchandise sales, and interchange fees.
Just Eat Takeaway operates on an economic model that is based on a marketplace where it matches the supply (restaurants and arguably freelance or employed drivers) with demand.
In the last few years, this marketplace has increased to millions of customers per month. The company was able to explore other cross-selling opportunities, like selling ad placements on its most frequented applications or business catering services.
Let’s look more closely at each of Just Eat’s revenue streams in the sections below.
Restaurant Commissions
A majority of money generated by Just Eat Takeaway generates comes from the commissions restaurants receive for each order they make through their platform.
The commission rate may differ in accordance with a number of variables, including the location of the restaurant as well as the restaurant’s negotiation strength (a Burger King likely pays more than a kebab shop in the area).
Typically, Just Eat Takeaway charges between 10 and 15 percent commissions. For instance, if the customer places an order for food that is worth $10, Just Eat gets to keep anywhere from $1 to $1.5.
Delivery & Service Costs
In addition to restaurant commissions, Just Eat Takeaway also has a delivery charge (when it is done by contractors) in addition to the service charge.
In the U.K. The platform can charge anything from zero and PS4.50 for each delivery and is dependent on the distance.
Regarding the service fee, which covers processing charges for payments along with various other offerings, Just Eat imposes another £1.99. It increased the fees to July 2021, removing the 50p that it had charged previously.
Sponsored Placements
Restaurants and other businesses that are part of the Just Eat Takeaway platform can enhance their presence by promoting places.
Promoted placements are a method of advertising that puts a restaurant on one of the most popular results on the platform’s numerous apps or web pages.
Just Eat Takeaway generates revenue through sponsored advertisements using the Cost per Click (CPC) model. This means that every when a user clicks an advertisement and the restaurant is required to pay a fee.
Restaurants sign a 6-week agreement in partnership with Just Eat. They create an annual budget, from which CPC fees are calculated. When the budget is exhausted the restaurant will be taken off the top spot.
Merchandise & Packaging Sales
Another source of revenue, although relatively modest to Just Eat Takeaway is the selling of products along with packaging machines.
The merchandise includes clothes and other accessories for couriers, while the packaging is used to deliver the food being shipped.
Fees for Interchange
On August 20, 2021, Just Eat Takeaway announced the signing of a partnership together with Adyen, a processor for payments that makes online payments for different (tech) businesses.
The two companies have introduced the known as “TakeawayPay Card” which is a pre-funded debit card that employees can use to pay for the cost of meals.
The card permits employees to buy goods and services from thousands of stores and restaurants which accept Maestro as well as Mastercard.
Similar to any conventional credit or debit card there is an interchange fee that is paid by the merchant.
The interchange fee amounts to around one percent. It is likely that Adyen as well as Just Eat will share those earnings in the course of their collaboration.
Just Eat Funding Income & Valuation
As per Crunchbase, Just Eat and Takeaway.com have raised the sum of $2.9 billion in nine rounds of debt and equity financing.
The most notable investors are Rheingau Founders, Prime Ventures, Redpoint, Index Ventures, 83North, Venrex, and many more.
At the time the two companies joined forces, Just Eat Takeaway was valued at around $10 billion. Now, the business is valued at nearly $17 billion.
For the budget year of 2020, Just Eat Takeaway posted earnings that were $2.85 billion, which is up 54 percent over the prior year.
How Did Just Eat Begin? The Company Timeline
2000 – 2005
Just Eat, initially incorporated in Kolding, Denmark, was established around 2000. It was founded with Jesper Buch Laurens Groenendijk Marc Wesselink, Martijn Rozendaal, and Per Meldgaard.
At the time, 25-year-old Buch was finishing a diplomacy assignment in Norway. One evening he found himself craving a good old Italian pizza.
However, as a newcomer to the town, he was unaware of any local pizza places. After a quick internet search and a quick look at the results, he discovered that virtually nothing about local restaurants was available on the internet, or even allowing customers to place orders for food.
This anger was the catalyst for what was later to be Just Eat. After his return to his homeland of Denmark. He soon was struggling to raise funds. The burst of the bubble resulted in nearly all venture capital funds disappearing in a matter of minutes.
Instead, he decided to seek out prospective acquaintances to assist him in building the site, giving them substantial equity stakes as a reward. He also partnered with a dating company to promote the company to the wealthy and looking for a partner.
The company was founded under the name FoodZoom The company soon was able to secure Carlsberg which is one of Denmark’s largest firms, as its initial partner. The company also Buch discovered that a different group of entrepreneurs was exploring a similar idea. In addition, they even negotiated an agreement to partner with Coca-Cola.
To avoid an unproductive battle over the same partners and customers, Buch and his team chose to join another company, and adopt their own name, Just Eat, as well. Then, in August of 2001 the newly-established company was launched just-eat.dk.
Just Eat, back in the day, was founded as a customer introduction platform for takeaways. This meant that the company only listed and sorted other restaurants on its website, while the delivery process itself was managed directly by restaurants.
However, in 2003 it was evident that the merger worked out exactly as planned. The founders fought constantly and did not generate substantial revenue for the company. Buch and his co-founders reached an arrangement with a new group of members to purchase them outright.
2005 – 2010
With the new and old teams established, they started to make the company more profitable. In the year 2004, Just Eat turned break-even and by 2005 they had even earned profits of over 100,000. The company then began to launch in Iceland to test its idea in other markets.
In 2005, however, the founding members (apart from Buch) sold their shares of Just Eat to Bo Bendtsen who was a Danish tech businessman. In connection with the purchase, Buch moved to the U.K. where Just Eat was planning to open its third market.
A few months earlier, Buch met with a young Welshman known as David Buttress who at the time was working for Coca-Cola UK (through which he became acquainted with Buch). Following this, Buch was able to convince Buttress to assist the business of Just Eat within the U.K. They established their business in a single-bedroom home situated in East London.
They launched their business in the month of March 2006 when they began their U.K. business. In addition to the U.K. launch, Just Eat also relocated the headquarters of its business from Denmark and relocated it to London. In less than a year it was reported that it was able to say that the U.K. business was generating about PS7,000 per month, which allowed the company to employ an individual salesperson who will then be able to take on additional restaurants.
In order to make the business more professional, Just Eat brought on Klaus Nyengaard, an experienced Danish founder and chief tech officer, as the company’s new CEO. Under his guidance, Just Eat also launched in several other countries, such as The Netherlands, Sweden, Belgium, Ireland, Norway, and many more.
Then, a year later, in the month of July, Just Eat managed to fund its first investment in venture capital. Index Ventures and Venrex Investment Management invested $10.5 million into the company. When the funding was made about 6,000 restaurants had partnered With Just Eat (of which half could be traced directly to the U.K.).
2010 – 2020
In the following two years that the site was on the growth path. To sustain its expansion, Just Eat raised another $48 million in March 2011. At the time of that, it had nearly more than doubled the number of restaurants it was working to (15,000).
After a few months, it was obvious why the money was increased. Just Eat began expanding further through the process of acquisitions. In October of 2011, it purchased U.K.’s Urbanite as well as Canadian’s GrubCanada. A few years later, the company made its way into France by purchasing Alloresto.fr The country’s food delivery online leader at the time.
Just Eat continued to raise additional funds and this time added $64 million via Just Eat’s series C in April of 2012. The acquisition spree was also rekindled by acquiring SinDelantal in Spain. SinDelantal during the month of October.
The expansion was planned to continue in the absence of CEO Nyengaard who quit his position in order to spend more time with his children in Copenhagen. Under his direction, Just Eat grew from 35 employees to more than 1,000.
U.K. chief Buttress, who was instrumental in establishing the company in London was his successor. He was not just in charge of the ongoing acquisitions of the business but also assisted in its transition to become a publicly-traded company. The company went public in March 2014. Just Eat announced that it was planning to go public. This took place the following month in April.
Its company was valued at about $2.44 billion at the time it was listed on the stock exchange. In addition, over 36,000 restaurants sold their food via the platform.
The flotation also enabled the company to build its reserves for war in the ongoing food delivery battles. Other platforms, such as Takeaway.com, Delivery Hero, and Foodpanda (which had been heavily backed through Rocket Internet) invested billions into the various markets that could be found across the world.
Just Eat responded in the only way it could: by expanding its operations through acquisitions. In February 2015, the company purchased Mexico’s SinDelantal. In May, it spent the sum of $687 million to acquire Menulog the largest food delivery service available in Australia as well as New Zealand.
In the first quarter of 2016, all the competing platforms had decided it was the best option to reduce their spending and consolidate their positions in the market they were dominating. In the end, the online food delivery system is typically only profitable if your business is considered to be a market leader (or closely second).
Unfortunately, Just Eat wasn’t able to remain in its lane for long. In the meantime, it was when a new wave of food delivery startups started to appear. These companies, such as Deliveroo or Uber Eats, hired independent contractors who would then take food orders from restaurants that did not have their own drivers.
In this way, Just Eat not only was forced to keep doubling down on acquisitions (which affected the bottom line) but also shed businesses that were not profitable. In August, for instance, the company had to sell the company’s Belgian as well as Dutch operations for Takeaway.com in exchange for EUR22.5 million.
The company’s most significant deals occurred at the close of 2016, when December it bought Delivery Hero’s Hungryhouse for $251 million, and also the Canadian-based SkipTheDishes for $83 million.
The start of 2017 however, was not favorable to the business. In February the CEO Buttress was forced to step down from his position because of family reasons. His replacement was John Hughes, the group’s chairman, who died days later of an unintentional illness.
In addition, to make matters even more complicated, the UK’s Competition and Markets Authority (CMA) initiated an investigation into the acquisition of Just Eat by Hungryhouse in order to determine if the acquisition will affect competition in the country.
It was in the month of July that the business finally found a replacement for its CEO. The long-time Moneysupermarket chief executive Peter Plumb leading the company.
Most importantly, Just Eat finally began to follow the model of rival startups like Deliveroo. When the hiring of Plumb was announced, the company launched trials with competitors like Burger King and KFC to provide food to these companies (through Independent contractors).
The CMA also approved its Hungryhouse deal in the month of October, noting the possibility that new market players will provide a stable level of competition. U.K. public markets welcomed these developments, putting Just Eat into the FTSE 100 index, which is one of the nation’s 100 most powerful companies based on market capitalization.
Unfortunately, the year 2018 was more difficult for the platform. In the beginning, Just Eat enraged its customers by introducing a 50p cost on all orders (which was previously only used on credit card payments).
In December, an activist hedge fund investor Cat Rock Capital Management, with a 2 percent stake in the company at the time, announced the fact that Just Eat had “become the worst-performing public equity in online food delivery globally”.
A few months later, following the CEO Peter Plumb stepping down from his position less than a year following the appointment of Peter Plumb, Cat Rock sent an open letter to the company’s board, asking for the merger of another food delivery firm.
From the Reuters news report: “A merger with a well-run industry peer would be a far better outcome for shareholders than relying on the board to choose a new CEO, particularly given the board’s poor record of CEO selection.”
Cat Rock’s wishes were granted in July 2019. Just Eat merged with Amsterdam-based Takeaway.com in the deal which valued the combined company at about $10 billion. Jitse Groen who was Takeaway’s founder and CEO would be the new chief executive. Additionally, the company has raised EUR680 million to repay the current debts of its two previous companies.
2020 – present
The merger was concluded on February 20, 2020 everything went as planned. Just Eat Takeaway.com initiated proceedings against Delivery Hero, which weeks before had pledged to buy 8.4 million shares of the combined entity, but failed to make the acquisition by the time of the due.
Then, the lockdown measures due to the coronavirus outbreak sent the entire world into a frenzy, and the stock of Just Eat soared. The company’s market for addressable products increased by a whopping 50% within a matter of hours. In the process, the stock climbed to an all-time high.
In June of 2020, Just Eat announced that it was going to acquire U.S.-based Grubhub in an all-stock transaction worth about $7.3 billion. It would grant the company a significant presence in the fiercely aggressive North American food delivery market that was dominated by DoorDash, Uber Eats, and Grubhub.
In a typical Just Eat style, the company continued its expansion through 2021. It raised two rounds of additional funds, an EUR1.1 billion round of debt in the month of February and $549 million in equity funding in August. Additionally, it bought Slovakia’s Bistro.sk for an additional EUR50 million in July 2021.
Today over 10,000 employees work for Just Eat Takeaway which operates various offices around the globe.
In January 2022, Just Eat expanded its offering from takeaway to grocery shopping. They claim to be able to reach 60% of the UK’s population. Milk and dairy products are one of the most popular items purchased.
