DoorDash has reached an agreement with Square to purchase on-demand food delivery and catering business Caviar . DoorDash has agreed to pay Square $ 410 million in cash and preferred DoorDash stock.
Square bought Caviar about five years ago in a deal worth about $ 90 million. Now, Caviar has found a new home with DoorDash, the on-demand delivery startup that had been under fire for months regarding how it pays its delivery workers. DoorDash finally did right by its workers just last week.
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“Today’s announcement is another important step forward on our mission to empower local economies,” DoorDash CEO Tony Xu (pictured above) said in a statement. “We have long-admired Caviar, which has a coveted brand, an exceptional portfolio of premium restaurants and leading technology. The acquisition further enhances the breadth of our merchant selection, enabling us to offer customers even more choice when they order through DoorDash. We look forward to welcoming the Caviar team to DoorDash and expanding our partnership with Square in the future.”
With Caviar joining DoorDash, Square’s Caviar lead, Gokul Rajaram, along with all the other Caviar employees will join DoorDash once the acquisition closes. The deal is expected to close sometime this year.
“Caviar has built a trusted brand with customers and many of the best restaurants,” Rajaram said in a statement. “DoorDash has national scale, complementary restaurant selection, a tremendous logistics platform, and a team that shares our passion and commitment to better serve restaurants, couriers, and customers. I’m incredibly excited to be joining, with the rest of the Caviar team, to help build the future of local commerce.”
For Square, this deal provides the company with an opportunity to focus more on its products for businesses and individuals, Square CEO Jack Dorsey said.
“We are increasing our focus on and investment in our two large, growing ecosystems — one for businesses and one for individuals,” Dorsey said. “This transaction furthers that effort, and we believe partnering with DoorDash provides valuable and strategic opportunities for Square.”
Meanwhile, Square just reported its Q2 2019 earnings with net revenues of $ 1.17 billion (44% y/o/y growth), adjusted revenues of $ 563 million (46% y/o/y growth) and a net loss of $ 7 million. In Square’s letter to shareholders, the company described how there will now be more clarity regarding how the company operates.
This story is developing…