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Square unveiled its second-quarter financial results this Thursday. The mobile payment brand shared information related to it $26.8 billion gross payment volume along with touching bases upon their future strategies and expectations.
However, the announcement that gained huge momentum in this meeting was their decision to sell Caviar – the food delivery service they acquired back in 2014 for $90M.
They revealed that they will be selling Caviar to DoorDash for $410M. And the amount will be delivered to them in the form of cash and DoorDash preferred stock.
They also disclosed that the acquisition will bring a significant difference in their core businesses as well as their business relations.
With this agreement, Square will be able to focus on its core market, i.e, mobile payment more effectively. They will be able to amp up their sales and revenue, and focus on becoming an uncontested leader in the mobile payment industry – a hint of which is given by Jack Dorsey, the software engineer at Square and founder of Twitter:-
“We are increasing our focus on and investment in our two large, growing ecosystems — one for businesses and one for individuals. This transaction furthers that effort, and we believe partnering with DoorDash provides valuable and strategic opportunities for Square.”
Talking about DoorDash, the brand will get better opportunities to improve its present business and revenue model. It will be able to work closely with Caviar’s premium restaurants to cater to every food preference.
Besides, DoorDash will also be able to take advantage of Caviar’s prominent technology and proficient team, who focuses upon delivering an exceptional experience to merchants, couriers, and users.
“Today’s announcement is another important step forward on our mission to empower local economies,” DoorDash CEO Tony Xu shared. “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.”
Furthermore, this partnership will strengthen the relationship between Square and DoorDash.
“DoorDash”, as shared by Dorsey, “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.”
The acquisition will close by the end of the year after which, Caviar lead, Gokul Rajaram and his whole team, will join DoorDash.
The Caviar acquisition translates into the still prevalent ripeness of the food delivery market, which was presumed to be a stagnant sector.