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Square Sold Food Delivery App Caviar To DoorDash For $410 Mn After Failing In First Attempt

The acquisition deal did not go well with Square’s investors as its stock fell to 9% in extended trading.

Square Sold Food Delivery App Caviar

Competition among major food delivery apps is heating up.

DoorDash, a big name among food delivery service providers has acquired its San-Francisco based food delivery rival Caviar. The acquisition deal is said to be consists of a mix of cash and DoorDash Stock.

Caviar, a food delivery platform is reportedly being sold by its parent company Square for $410 million to DoorDash. In 2014, Square, a mobile payment company founded by Jack Dorsey initially purchased the Caviar for a $90 million. 

With door delivery food platform, DoorDash joining Caviar, its head Gokul Rajaram and rest of the Caviar employees will unite with DoorDash team after finalising the acquisition agreement. The purchase deal is expected to close later this year.

DoorDash co-founder and CEO Tony Xu  stated, 

He further added,

Launched in 2013, Caviar planned to do something different from other best food delivery apps like GrubHub and rather focusing on budget restaurants and fast-food chains, it put its attention on premium restaurants. Interestingly it was also one of the first food delivery apps to appoint its own food messengers instead of relying on the restaurant’s delivery man.

Gokul Rajaram stated,

However, the acquisition deal did not impress the Square’s investors much. After the announcement of DoorDash acquiring Caviar, the stock of Square fell to 9% in extended trading. During the earnings call, Square founder’s Jack Dorsey said,

Square has also attempted to sell the Caviar previously. In 2016, it offered the food delivery app, Caviar to Uber, yelp, and GrubHub. But at that time the price tag of $100 million did not interest anyone that much.

Square stated in its Q2 shareholder letter,

Even before the acquisition of Caviar, DoorDash was planning to cement its place as the biggest food delivery platform. As per Analytics firm, Second Measure, DoorDash recorded 34% of all U.S. meal delivery sales. 

This year, also DoorDash is quite active in raising the funds to expand its business. In the start of this year, it raised $400 million and in May, it went up to more bigger funding, raising $600 million in Series G round.

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Manish
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Manish

With a mixture of literature, cinema, and photography, Manish is mostly traveling. When he is not, he is probably writing another tech news for you!

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