In a letter to Square, Inc. shareholders:
Today we issued a press release with DoorDash announcing that we have entered into a definitive agreement in which DoorDash has agreed to acquire Caviar, our food ordering platform, for $410 million in a mix of cash and DoorDash preferred stock. This transaction allows us to increase our focus on and investment in our two large, growing ecosystems—one for businesses and one for individuals. It creates clarity in how we operate and a clearer purpose and alignment for our planning, investment, and work moving forward. Furthermore, DoorDash is already integrated with Square for Restaurants, which streamlines the acceptance of online and in-person orders for merchants, and in the second
quarter Cash Boost partnered with DoorDash to provide instant rewards when customers use their Cash Card at DoorDash. We believe continuing this partnership provides valuable and strategic opportunities for Square.
Well. That was unexpected. What a great deal for Square — they walked away with a $370M profit (Square, Inc originally purchased Caviar for $41M). Amidst past sales attempts, this one stuck. Even better, the payments company can now move forward on their own growth goals without having the overhead of Caviar. I’m concerned that Caviar got the short-end of the stick. Mainly because DoorDash has been problematic in the past. The Times discovered the company’s strange tipping scandal. The good news is, DoorDash’s CEO is at least receptive to changing the model:
Now that DoorDash is a very serious player in the food delivery netherworld, it’s a force to be reckoned with. I’ve loved Caviar since before it joined forces with Square. So, I’m happy to see it join a company that shares the same goals. I’m also pleased to see that it will operate independently (at least for now). From Caviar’s support portal:
Caviar is excited to be joining the DoorDash team! Caviar will continue to operate as a separate, standalone company in the immediate future, and nothing changes about your experience ordering from Caviar in the meantime – you can continue to find your favorite restaurants and place orders on the Caviar app.
Very curious to see this all play out as the food delivery wars rage on.