GrubHub IPO: Mobile Market Key to GrubHub's Success

Investors can add another deal to the 2014 IPO calendar, with the GrubHub IPO expected to take place on Thursday, April 3.

Today, Grubhub officials announced that they have upped the price range on Grubhub stock to $23 to $25, from a previous range of $20 to $22.

Last week, GrubHub officials announced that they plan to raise approximately $155 million in an initial public offering by selling 7.03 million shares.

That would value the company at approximately $1.72 billion.

GrubHub allows users to place pick-up and delivery orders for restaurants either online or through a smartphone app. Currently, it is the largest online food delivery services provider in the United States. 

As of Dec. 31, 2013, GrubHub has worked with 28,800 restaurants and boasts a customer base of 3.4 million active users. The company also averaged 135,000 orders processed daily in 2013.

For the full year 2013, GrubHub reported revenue of $137.1 million, which was an increase of 67% from 2012. However, the company did watch its net profit fall more than 16% in 2013 to $6.8 million from $7.9 million in 2012.

GrubHub will trade on the New York Stock Exchange under the ticker "GRUB." Citigroup Inc. (NYSE: C) and Morgan Stanley (NYSE: MS) will be the lead underwriters on the IPO.

The company stated that 4 million of its shares will be sold to investors and the remaining 3.03 million will be offered to insiders such as venture capital firms like Goldman Sachs Group Inc. (NYSE: GS), Warburg Pincus, Thomas H. Lee Partners, and Benchmark Capital.

Looking past the basics of the GrubHub IPO, here's a factor that investors will want to watch closely ahead of the deal…

Mobile Industry Key to GrubHub IPO

While analysts will point to GrubHub's shrinking profit margin as an area of concern, one major bright spot is the company's growth in the mobile space.

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