Sources: Square discussed selling Caviar with Uber, GrubHub, and Yelp in talks from late 2015 to early 2016; proposed price of $100M was rebuffed
and still has. http://qr.ae/8QuxFi http://twitter.com/... Anand Sanwal / @asanwal : @DelRey @Techmeme this acquisition made zero sense from day 1. Pointless fad chasing
Context & Ripple Effects
Square spent mid-decade trying to make Caviar work as more than an experiment: six months after buying it, Caviar had tripled orders and doubled headcount (tripled orders post-acquisition), and by 2017 Square was still adding pieces, buying OrderAhead's takeout-ordering assets while Caviar launched its own pickup service (OrderAhead asset purchase). Yet per this report, Square privately shopped the business to Uber, GrubHub, and Yelp from late 2015 to early 2016 — and its $100M asking price found no takers.
The rebuffed sale is what makes the ending sting: three years later DoorDash agreed to pay $410M in cash and stock for the same business (DoorDash's $410M Caviar acquisition), and Uber's Dara Khosrowshahi confirmed his company had weighed the deal before passing (Uber's admission it considered and passed on Caviar). The story is a rare public record of how cheaply a category leader could have been built — and wasn't.
First-order effects
- The named suitors — Uber, GrubHub, and Yelp — each declined Caviar at $100M, leaving Square stuck running a non-core delivery operation it had already concluded it didn't want.
- DoorDash is the immediate beneficiary of everyone else's pass: it acquires Caviar's premium urban customer base and courier network for $410M, four times the price the original buyers refused.
Second-order effects
- GrubHub and Uber now compete against a rival whose density in upscale city markets they could have owned for $100M — and Uber's own CEO has had to publicly explain why it passed on a deal its competitor later paid quadruple to close.
- Square exits delivery entirely, freeing capital and management attention for its payments and seller businesses while offloading the cost structure of a courier fleet onto DoorDash's balance sheet.
Third-order effects
- If the pattern holds, US food delivery consolidates around a few scaled platforms, and the price of entry keeps rising: assets that go unsold at nine figures get absorbed later by the survivors at multiples of that figure, punishing hesitation by second-tier buyers like Yelp and GrubHub.
- For fintech companies, the episode sets a precedent for pruning consumer-marketplace experiments early rather than funding them indefinitely — the buyer pool for sub-scale delivery assets narrows even as their eventual exit value grows.
The trend: Food delivery is consolidating around a handful of scale platforms, with would-be buyers paying steadily rising prices for assets they once walked away from at a fraction of the cost.