Tuesday, December, 05, 2023 03:23:37
DoorDash procures Caviar food delivery service for $410 million
- DoorDash buys Caviar from payments company Square, which had purchased Caviar for $90 million in 2014.
- DoorDash also altered its controversial tipping policy in the previous week.
DoorDash, a San Francisco-based food delivery service established in 2013, has reportedly announced that it will acquire its food delivery service rival, Caviar for $410 million. DoorDash would be acquiring Caviar from payments firm Square, which had acquired Caviar for $90 million in 2014.
Reports cite, the company would be funding the transaction through preferred stock and cash. The move would further strengthen the competitive delivery market landscape and pit DoorDash against UberEats, GrubHub, and Postmates.
The CEO of DoorDash Tony Xu stated that the company has admired Caviar since a long time as Caviar is a coveted brand that boasts of a portfolio that contains leading technology solutions and premium quality restaurants. Xu also stated that the takeover further improves scope of the company’s merchant selection, allowing it to facilitate more options for customers when they order using DoorDash.
For the record, DoorDash has been taking on the largest food delivery market players even prior to the Caviar takeover, gaining considerable ground in the process. According to Second Measure, an analytics company, DoorDash service was used more than that of any other food delivery company last month, gaining 34% of total U.S. food delivery sales.
Standing close behind on the second position, GrubHub, which owns Eat24 and Seamless, made 33% of total sales with UberEats holding 17% of sales and Postmates accounting for 11%.
Meanwhile, DoorDash was recently criticized on the way it handles tips that are given to delivery drivers. However, amidst mounting public pressure, last week DoorDash altered its controversial tipping policy, which previously used tips to subsidize delivery drivers’ base wage.
According to reports, Head of Caviar, Gokul Rajaram would come onboard DoorDash along with all Caviar employees as soon as the deal closes. Shares of Square dropped by more than 5% after the trading following the announcement.
Source Credits: https://www.forbes.com/sites/rachelsandler/2019/08/01/doordash-acquires-rival-food-delivery-service-caviar-for-410-million/#7c933b93241b