The food delivery world is getting smaller. DoorDash has agreed to buy rival food delivery platform Caviar from Square for a total of $410 million in cash and stock. Square CEO Jack Dorsey said during a second-quarter earnings call today that the move would allow the company to focus on its core money delivery business.
"We have seen a lot of opportunities to strengthen both these ecosystems but those opportunities require more focus and more investment," said Dorsey during the earnings call. "To increase our focus, we decided to sell our Caviar business to DoorDash."
Caviar, which first launched in San Francisco in 2013, aimed to offer a more premium experience than other food delivery platforms at the time, such as Grubhub and Seamless. Instead of typical delivery fare such as fast food, pizza or Chinese, Caviar targeted upscale restaurants that didn't normally offer delivery. It was one of the first food-delivery platforms to employ its own "food messengers" rather than rely on delivery drivers employed by the restaurant.
DoorDash is hardly the first food-delivery platform to buy up one of its rivals. Grubhub, which merged with Seamless in 2013, has since acquired Eat24, AllMenus, MenuPages, LevelUp and Tapingo, the campus food delivery platform. Both Grubhub and UberEats were once the biggest players in the food delivery game, but DoorDash may soon top them. Explosive growth this year has lead to it outperforming its competitors in consumer spending and coverage area.