Groupon, Inc. GRPN shares were up about 3.08% in yesterday’s trading session after the company revealed its plans to expand OrderUp, its on-demand food delivery service. OrderUp has formed an alliance with U.S.-based Qdoba Mexican Eats. As a part of this alliance, Qdoba will leverage OrderUp’s delivery network.
Per the deal, through OrderUp, customers in as many as 40 markets will be able to place orders from Qdoba (at 675 locations) and get it delivered at their doorstep. The two entities have already started the service in a few markets like Baltimore, Charlottesville, Cincinnati, Indianapolis, Nashville and Richmond and it’s expected to be rolled out to other regions in the near future.
As Groupon puts it “We’re thrilled to partner with Qdoba and provide them with the scale and end-to-end ordering and delivery capabilities they need to reach new customers.”
Groupon had acquired OrderUp in 2015 for approximately $69 million. In Mar 2016, the company had expanded OrderUp to offer services in Pittsburgh and even collaborated with institutions like University of Pittsburgh, Duquesne University, Carnegie Mellon University and Chatham University in the region for delivery services.
Since the beginning of this year, Groupon has been undergoing a business transition under CEO Rich Williams. The daily deals company is now striving to redefine itself as a local marketplace. Meanwhile, expanding its food delivery business will not only diversify its revenues but also significantly boost its local business.
On the other hand, Qdoba will likely benefit from Groupon’s strong local customer base.
Groupon carries a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include Internap Corporation INAP, Atlassian Corporation Plc TEAM and Castlight Health, Inc. CSLT, each carrying a Zacks Rank #2 (Buy).
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