LOS ANGELES, CA - Food delivery, especially in the wake of COVID-19, has become an increasingly hot space for investors, and AndNowUKnow was fortunate enough to get an insider perspective regarding one of the latest acquisitions we’ve covered. Montminy & Co., a Los Angeles-based investment banking firm, was hired by Delivery Dudes in the summer of 2020 to explore its strategic options—which resulted in its acquisition by Waitr. I spoke with the firm’s Founder and CEO, Joel Montminy, to learn more.
“We felt Delivery Dudes would be an attractive asset to a variety of strategic buyers. They had built a cult-like following in South Florida based on strong brand awareness, exceptional customer service, local operations (vs. outsourced/overseas), proprietary technology, highly-trained drivers, and restaurant loyalty,” Joel noted. “Their management team was smart, young, and ready to dive into their next challenge, which they have found in Waitr.”
Joel informed me that over the past year alone, the competitive landscape in home meal delivery has shifted almost daily as the largest players clamored to consolidate and take market share during the COVID-19 home meal delivery boom. Sources say that as one of the few profitable enterprises in the space, Delivery Dudes recognized an opportunity to garner interest and ensure they were part of a more diversified platform post COVID-19.
Joel declined to comment on who else was at the table but noted that, “We have multiple offers from many of the leading names in meal delivery. Waitr presented us with a compelling upside opportunity that was embraced by both management and the selling shareholders.”
When asked about valuation or specific terms, Joel kept specifics close to the vest, but did share that, “Well-run operations in this industry, like Delivery Dudes, will trade on multiples of revenue.”
As the online food delivery and last-mile fulfillment ecosystem evolves, he believes that increased price compression will result in a handful of larger tech-enabled platforms that handle meals, pharmaceuticals, and other items. While there might be some post-COVID pull-back from consumers, Joel believes food delivery has become a central part in consumer eating habits driving more sector acquisitions in the near future.
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