DoorDash Goes Shopping: Term Sheet

August 2, 2019, 1:25 PM UTC

The food delivery wars continue in full force.

Food delivery giant DoorDash bought rival Caviar for $410 million. Square, the mobile payments company, had owned Caviar since 2014, and it was looking to offload the service. 

“We have not been shopping around,” DoorDash CEO Tony Xu said. But when Square’s Jack Dorsey reached out about a month ago, Xu said he saw an opportunity that would beef up its business to better take on competitors such as Postmates, Grubhub, and UberEats.

DoorDash already provides delivery services for more than 310,000 restaurants across 4,000 cities in the U.S. and Canada. But it has historically expanded across suburban areas. Meanwhile, Caviar, founded in 2012, has focused on urban cores.

My colleague Danielle Abril reports:

The details of how the two services would be integrated haven’t been determined. 

DoorDash, founded in 2013, is still in growth mode, Xu said. The company was most recently valued at $12.6 billion after a $600 million funding round in May, according to PitchBook. The delivery service has been one of the most capitalized player in the industry, raising $1.97 billion since inception, as it competes against the rivals Uber Eats, Grubhub, and Postmates. 

In addition to its restaurant delivery, DoorDash also earns money from its DoorDash Drive platform, which allows businesses to integrate DoorDash’s technology and fulfillment services into its own app or website. The platform helped DoorDash land Walmart and become as its largest delivery partner, serving 1,000 stores nationwide. DoorDash also generates revenue from its a service that lets customers order food online for pick it up themselves, and DashPass, its monthly subscription offering. 

And there are more services coming, Xu said. 

“Restaurant delivery is just the beginning on how we hope to touch and grow every local business,” he said.

Read more at Fortune.

BIG NEW MONEY: Toronto-based startup Clearbanc, which funds companies’ purchases of Facebook and Instagram ads in exchange for a fee, raised $300 million in new funding. Of that capital, $50 million is a Series B equity investment led by Highland Capital, with iNovia and Emergence Capital also participating. 

The remaining $250 million will go into Clearbanc’s third fund, which it uses to invest in e-commerce companies under unique terms: Clearbanc fronts the money startups need to purchase digital ads, but instead of taking an ownership stake, Clearbanc charges a 6% flat fee, taking a share of the companies’ revenue until it is paid back. Read more.

LOVES ME, LOVES ME NOT: You know when you think one thing & then it turns out the reality of it is totally different? Well, you’ll enjoy this survey. Private equity firms often tout the value they bring to the management teams of the companies they back. But a new survey reveals something entirely contradictory. 

PE-focused consulting and technology firm Accordion surveyed 200 private equity executives and portfolio company chief financial officers about their interactions. Here’s what it found:

Among the 100 private-equity professionals surveyed, 92% said they believe they are living up to the expectations of their portfolio company CFOs. But only 29% of the 100 CFOs in the survey agree. 


Have a great weekend!


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