After over a month of rumors, Square announced Monday that it has officially acquired Caviar. Square, which specializes in mobile payments, is hoping the food delivery company will help improve it bottom line. No confirmations have been made on the amount paid for Caviar. However, last Friday, The New York Times reported rumors of a $90 million all-stock trade.
What is Caviar All About?
Caviar, which was founded in 2012, is a food delivery start-up company. Until the buyout, it did its best to distinguish itself from familiar companies in various ways. The most notable is its partnerships with restaurants that don’t provide delivery services to customers.
Many have compared its services to that of Seamless and GrubHub. But, they’re extremely different. These two act as “food routing switchboards” for local restaurants who already offer delivery services. Customers simply log onto one site, get a list of restaurants delivering in their area, and order from that one site. The site then acts as a mediator, processing payments, sending orders to the proper restaurants, monitoring delivery status, etc….
What Makes Caviar So Unique
The service provided by Caviar is much more specialized. Its major draw is that is partners with restaurants that do not deliver. Most are high-end restaurants that are popular among local consumers. Using the Caviar Delivery Service, a consumer can order food from partner restaurants. A Caviar Courier will then pick up the order from the restaurant, and deliver it directly to the customer’s door.
Jack Dorsey, Square CEO, said in a statement:
“Caviar's curated, seamless delivery experience is exactly the kind of service we want to provide buyers and sellers.
By making delivery such a fast, friendly, and easy process, Caviar gives time back to restaurants so they can focus on what they do best -- cooking great food for their customers.”
Executives Hopeful Square Will Increase Caviar Market Share
For now, the services provided by Caviar will remain separate. Executives are predicting that, in time, the resources behind Square will help Caviar grow. Currently, there are over 50,000 restaurants using the payment processing services of Square.
Yet, Caviar only operates in the San Francisco Bay area, Los Angeles, New York, Boston, Washington D.C., Seattle and Chicago. The acquisition is expected to increase Caviar’s market share enormously. For more information, read “Square & Caviar: The Future of Food Delivery”
Square & Caviar VS PayPal & Eat24
Square does have its work cut out. It is by no means the first of its kind. In 2013, the online payment processing company, PayPal, integrated with Eat24, an online food routing switchboard service. This allowed Eat24 users to order food online, pickup and delivery, then pay using PayPal.
Will Square be able to use its payment processing services to make Caviar even bigger than Eat24? Let us know how you feel in the comments below.