Payments innovator Square has entered into a definitive agreement with door-to-door delivery technology platform DoorDash. So what is Square definitively doing here? They’re selling their food-ordering business, Caviar.
The acquisition, totaling $410 million in cash, is a win for both companies as the Caviar addition enables DoorDash to drive growth and momentum with the “ability to cater to every food preference and occasion,” according to the press release. The consolidation will also enable DoorDash to enlist a complementary geographic footprint that offers a unique customer base.
As for Square, CEO Jack Dorsey opens his remarks on the company’s Q2 earnings call by touting the company’s ability to “accomplish something very few companies have – the creation of not just one but two incredible customer ecosystems of scale.”
He goes on to explain that “To increase our focus, we decided to sell our Caviar business to DoorDash. This enables us to focus on serving restaurant and food sellers through a platform approach, specifically our Orders API and Square for Restaurants. “
DoorDash was an obvious choice, Dorsey said, “because of our pre-existing partnership through Orders API and Cash App. Both companies have an alignment of interest to strengthen our partnership,” according to a transcript of the call.
Already integrated with Square for Restaurants POS, DoorDash has been bringing value to the platform for some time and DoorDash CEO Tony Xu sees it as an important step towards their mission to “empower local economies.”
“We have long-admired Caviar, which has a coveted brand, an exceptional portfolio of premium restaurants and leading technology,” Xu said in the same press release. “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.”