GRUB GrubHub Inc

   (FROM THE WALL STREET JOURNAL 12/29/15) 

Bill Gurley Resigns

From GrubHub Board

Venture capitalist Bill Gurley is stepping down from the board of GrubHub Inc. amid mounting competition -- and growing potential for conflicts of interest -- in the business of food delivery.

Mr. Gurley, a partner at Benchmark who led the venture-capital firm's 2011 investment in GrubHub, resigned from the board last week, the Chicago company said in a Dec. 24 filing.

Analysts at Cowen & Co. on Monday noted the disclosure, citing Mr. Gurley's board seat on Uber Technologies Inc., the ride-sharing startup that has recently expanded a food-delivery service.

"We view [Mr.] Gurley's resignation as a loss to GrubHub, but not surprising given his board seat at Uber, which is increasingly competitive with GrubHub," analysts at Cowen & Co. said in its research note.

GrubHub Chief Executive Matt Maloney disputed the notion that Mr. Gurley was leaving because of any conflicts. In an interview, Mr. Maloney said Mr. Gurley is stepping down to focus more on startup investments.

"Bill is an incredible early stage investor and I support him as he dedicates more of his time towards more nascent endeavors," Mr. Maloney said.

Mr. Gurley didn't respond to requests for comment.

GrubHub's stock has fallen about 3% since last week's disclosure, including 1.5% on Monday to $24.99.

On its own, Mr. Gurley's resignation isn't unusual. Venture investors routinely give up board seats at startups as they mature into public companies and provide a return on their investment.

Benchmark, which held more than 12 million shares in GrubHub at the time of its April 2014 initial public offering, had sold all but about 1.5 million shares as of May of this year, according to a filing.

Mr. Gurley could also be reducing his board seats as he makes more investments. He is a director at multiple companies, including real-estate site Zillow Inc. and local social network Nextdoor Inc.

But leaving the board of GrubHub could reduce the possibility Mr. Gurley is forced to navigate a conflict of interest in at least two other Benchmark companies with growing stakes in food delivery. Besides Mr. Gurley's board seat at Uber, his Benchmark partner Peter Fenton sits on the board of Yelp Inc., which is in the food-ordering business after acquiring app Eat24 earlier this year.

GrubHub will replace Mr. Gurley with Katrina Lake, the chief executive of Stitch Fix, a Benchmark-backed online fashion startup.

-- Douglas MacMillan

Failed Golf Channel's

App Draws Interest

A golf channel that briefly aired to DirecTV subscribers before shutting down in February has filed for bankruptcy protection with a $2 million offer for a small piece of its operations: a smartphone app that mapped out more than 35,000 golf courses around the world.

Officials who put Hartford, Conn.,-based Back9Network Inc., into bankruptcy on Dec. 23 said a handful of investors want to save the app and repay some of the channel's debts, including a $4.75 million loan from Connecticut's economic development agency.

The channel, which aired briefly on DirecTV satellite network's channel 262, said it didn't have enough money to get off the ground since its 2010 founding.

It focused less on televising the sport and more on broadcasting live studio commentary and what it called "lifestyle" programming.

But the channel tried to get its start as the television industry consolidated its offerings. Back9Network lawyers also blamed "the deceleration of U.S. pay television household growth" in documents filed in U.S. Bankruptcy Court in Hartford, Conn.

The company, which once employed 80 people, is now down to two senior executives: Chief Executive Charles Cox and Chief Revenue Officer Reid Gorman.

Investors are proposing to buy the golf app. The app has been downloaded more than three million times and provides GPS mapping for more than 35,000 golf courses in 130 countries, court papers said. It is used for hundreds of thousands of rounds each month.

"Despite failing to create a profitable television network, the [company has] succeeded in forming a compelling online platform consisting of widely used online websites, the golf application and an email newsletter with a subscriber base of 1.7 million users," lawyers said in court papers.

The five existing investors behind the $2 million offer are retired United Technologies Corp. executive Karl Krapek, private-equity managing partner Denis Nayden, wood exporter Ted Rossi, KKR investment firm portfolio manager Paul Raether and Brian Furbish.

Under the purchase plan, the investors will continue to repay roughly $4.75 million in low-interest loans extended through the state's TV and film incentive program.

-- Katy Stech

(END) Dow Jones Newswires

December 29, 2015 02:47 ET (07:47 GMT)

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