DoorDash has reportedly closed a deal with Square for $410 million to purchase the food delivery startup Caviar. The amount will be paid in cash and preferred DoorDash stock. DoorDash is a last-mile delivery platform that connects customers with local and national businesses.
The company operates in over 4000 cities and all 50 states in the US and Canada. Cofounded by three Stanford students in the year 2013, DoorDash currently has a huge customer base and reaches almost 80 percent of the US household.
“Today's announcement is another important step forward on our mission to empower local economies. We have long-admired Caviar, which has a coveted brand, an exceptional portfolio of premium restaurants and leading technology,” quoted Tony Xu, CEO of DoorDash.
Launched in 2012, Caviar had been acquired by Square for a deal of $90 million about five years ago. Caviar, the food delivery platform became the first in the industry to provide an occupational accident insurance policy at no cost to all couriers partnered with them.
Square is a payment service provider that enables users to accept card payments through their smartphones and tablets. The company has set up corporate offices in the US, UK, Canada, Japan, Australia, and Ireland.
DoorDash had come into severe criticism recently regarding the wages offered to its delivery partners. The company had also been encouraging the delivery partners to receive tips from its customers.
Doordash had announced that it would address the issue by making necessary changes in policies, but so far it has been only mere words. This new acquisition is expected to shift the focus to the customers from the prevalent issue.
All Caviar employes, including Square’s Caviar Lead, Gokul will join DoorDash once the integration is complete. The collaboration is expected to come into effect by the end of 2019.
With this acquisition, DoorDash has opened the gates to use Caviar’s cutting edge technologies focused on expanding its merchant network.
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