One company was founded in Chicago by hungry software engineers, the other in New York by hungry lawyers. Both were looking to replace restaurants' paper takeout menus with Web-based technology. Now the two rivals are joining forces.

GrubHub, one of Chicago's most high-profile startups, is merging with New York-based Seamless to create an online food ordering company with more than $100 million in revenue and a combined network of more than 20,000 restaurants across the U.S. Both GrubHub and Seamless connect diners to restaurants that offer takeout and delivery, taking a cut of transactions processed through their technology platforms.

"I'm excited about three things: I'm excited about the expanded restaurant network that our diners will be able to use," GrubHub co-founder and Chief Operating Officer Mike Evans, who will be COO at the combined company, said in a Monday interview. "I'm excited about the larger number of diners available to restaurants and finally, the combined products for the two companies makes for a stronger offering."

Financial terms of the all-stock transaction, which is subject to regulatory approval, were not disclosed. The companies said they have yet to determine the name of the combined entity and make other branding decisions. GrubHub, which moved into new offices at the Burnham Center in the Loop last year, employs about 350 people, and Seamless has more than 300 employees. Evans said no one will be laid off as a result of the merger.

The new company will have offices in Chicago, New York, Salt Lake City and London. While Evans said executives "don't feel the need to specify a headquarters," members of the local tech community view the deal as a positive development for the area's blossoming startup scene. GrubHub co-founder and Chief Executive Matt Maloney will be CEO of a newly supersized company that far outstrips its competitors in reach and scale. GrubHub and Seamless collectively processed about $875 million in food sales last year via their website and mobile applications, and they are present in more than 500 cities in the U.S.

"Any success at this level is great for the startup community because it just puts another data point on the fact that you can start in Chicago and hit a home run," said Stella Fayman, co-founder of Entrepreneurs Unpluggd, a local speaker series featuring startup founders. Evans spoke at the inaugural event in 2010.

"Everyone in the community has kept their eye on GrubHub because there are a lot of rising stars within the tech community, but no one has reached the level of Groupon," Fayman said. "Everyone was eyeing GrubHub as maybe the next one to go public."

While neither company was talking Monday about an initial public offering, the merger could bring other kinds of resources into the local tech community in the short term. Fred Hoch, the president of the Illinois Technology Association, said Maloney's position as CEO makes Chicago the "center of gravity" for the new company and will attract fresh talent to the area as new hires are added.

"I would assume an IPO is in the works somewhere," Hoch said. "I know the size of the market they're after. Even as a combined entity it has tremendous market potential and growth potential."

Maloney and Evans were software engineers working at Apartments.com when they hatched the idea for GrubHub. (Tribune Co., the Chicago Tribune's parent, is a partial owner of Classified Ventures, which owns Apartments.com.) Their business plan for GrubHub won the University of Chicago Booth School of Business' New Venture Challenge in 2006 and the company has raised $84.1 million in venture capital through five rounds of funding. GrubHub and Seamless said their investors "will both have significant representation on the combined company's board of directors."

One of those investors is Northbrook-based Origin Ventures, which was one of GrubHub's earliest backers. Origin principal Bruce Barron said he remembers working with Maloney and Evans when the company had just five employees and 100 local restaurants in its network.

An early concern was how GrubHub would convince consumers to order food through its website instead of directly from the restaurant. Barron said the startup proved itself through good customer service and an easy-to-use website that displayed all nearby restaurants when diners put in their address.

"We felt early on that their user interface was, by far, superior to any other," Barron said. "We thought they could own the consumer because of the way they structured their website."

GrubHub and Seamless, while they have been competitive in cities such as Chicago for several years, have different historical strengths. GrubHub is focused on consumers ordering food at home in the evenings, while Seamless got its start on the corporate side, connecting restaurants with employees at law and financial firms who could expense their meals.

"I know people at both companies fairly well (and) I think culturally they're going to fit great," said Justin Massa, co-founder of Food Genius, a local startup that analyzes consumer dining data for the restaurant and grocery industry. It has partnered with GrubHub for several years. "They have very similar styles and work ethics, and the brands aren't that far apart — even the color scheme is the same. …

"With the narrative that was emerging around companies starting to nip at their heels, this changes the dynamic. It's difficult to see how anyone can catch up with them."

wawong@tribune.com

Twitter @VelocityWong