GrubHub Still Hungry


grubhubOne memory lingers especially sweet in the mind of Matt Maloney. That would be the morning of April 7, 2014–the Monday after his Chicago-based restaurant-order company, GrubHub, raised a gratifying $192 million in an initial public offering. “We had gotten through months of work, months of secrecy, the road show, the pricing, the bell-ringing,” says Maloney. “We came into the office and it was all cleared off our desks. We could look around and say, ‘Let’s attack.’ “

And attack they have. Maloney–on-point and polished–is speaking hours after his fourth quarterly earnings call as a public-company CEO. The results he delivered were chest-thumping: a 50 percent year-over-year revenue surge, to $73.3 million. A big jump in active customers, to more than five million. And the acquisition, for about $80 million, of two delivery services–the latest part of GrubHub’s strategy to control the entire takeout experience, from when an order is placed to when it appears at a customer’s door. (Of course, restaurants will still do the cooking.)

“People say, ‘Oh, I can’t believe you went public. Aren’t you focused on the short-term now?’ The answer is absolutely not,” says Maloney. “We are not looking quarter to quarter, but five years down the road. This is long-term investing, and it is really why we went public.”

Not every entrepreneur dreams of going public. Many in the middle market (we define this as having an annual revenue between $50 million and $1.5 billion) can accomplish their goals with private capital and M&A. Others dread what happens after the IPO confetti settles. Public-company CEOs face costly and time-consuming compliance issues. They walk a narrow line on risk. And while long-term planning is possible, still the market’s fingers are tapping … tapping …

But going public can also be just the accelerant that well-prepared, ambitious businesses need. With this issue, Inc. launches the Founders 40, an annual list comprising middle-market companies that have gone public in the past three years while still preserving their entrepreneurial spirit. These are classic fast-growth businesses: Almost two-thirds were among the Inc. 5000 between 2005 and 2014. Their founders still occupy the C-suite and the boardroom, and about 70 percent have held onto the CEO spot.

Such continuity is relatively rare. (See “Plan Your Own Demotion.”) But tracking these companies after they’ve gone public offers a perspective on entrepreneurship that is more difficult to get when following private companies: one based on access to data on net income and cash flow, and other financial disclosures required of public companies. The opportunity to benchmark against other entrepreneurial midmarket companies is obvious, and we plan to exploit that advantage in future issues of Inc. and at

Read more at INC.