Square has just purchased San Francisco-based food delivery startup Caviar, a somewhat unconventional acquisition for the payments provider. Both companies have officially confirmed the deal with posts on their respective blogs; Square CEO Jack Dorsey said in a statement that "Caviar's curated, seamless delivery experience is exactly the kind of service we want to provide buyers and sellers." It appears that Caviar's core service (meal delivery from restaurants that don't otherwise provide delivery services) will not be going away. An FAQ posted on the company's site notes that "everything [customers] love about our product and service will remain the same."
While a food delivery service might not be the most obvious place for Square to invest in, the company notes that over 50,000 restaurants already use Square for as their register service — and this deal could give the company an in to get even more restaurants to use its services. Caviar, which launched in San Francisco in 2012 and eventually expanded to "hundreds" of restaurants across six states, had been rumored to be a target for Square in recent days — The New York Times and Recode had both said a deal was coming soon.
Terms of the deal haven't been announced, but Recode and the NYT both claimed it would be an all-stock transaction valued at about $90 million. The purchase comes at a time when Square is experiencing some growing pains — reports earlier in the year pegged the company as on track for an IPO, but more recently it has seemed Square could be in a bit of financial trouble. The company has also had a tough time finding products that resonate with consumers the same way its payment systems have been successful for small businesses. The company recently killed its unsuccessful Square Wallet app and is trying again with a new mobile payment system targeted towards consumers.