Square’s on-demand food delivery service is launching a feature that gives customers more ways to get their order. Called Caviar Pickup, it’s exactly as sounds — instead of having food delivered to you, you can go directly to a restaurant to pick it up, thereby avoiding extra fees. This new service will initially be available in San Francisco, the East Bay, Los Angeles, and Portland.
In addition, Caviar is announcing that it has acquired mobile ordering startup OrderAhead. Financial terms of the deal were not disclosed, but sources familiar with the matter told VentureBeat that Square only purchased OrderAhead’s pick-up business. The status of the employees and remaining company assets is not known. Square will continue to operate the existing OrderAhead app but is expected to sunset the app over the next several weeks.
More than 3,000 restaurants in the U.S. use Caviar, but as the service competes against Postmates, GrubHub, Yelp’s Eat24, and DoorDash, it needs to beef up its offering. The addition of a pick-up feature could potentially entice new restaurants to sign up.
Square has spent the past several weeks beta testing Caviar Pickup, and now it’s ready to launch. Customers simply pay the price of their food — there are no additional fees. The appeal of a service like this is convenience; there may be times when you want to order lunch from your favorite burrito restaurant or get coffee from a place like Philz Coffee, but you don’t want to stand in line. Now Caviar lets you get in and out quickly.
The acquisition of OrderAhead’s pickup business coincides with the launch of Caviar Pickup, but it wasn’t part of the development process. However, Square believes Caviar can benefit from the deal, especially since it’ll be able to add businesses that use OrderAhead.
“OrderAhead’s expertise in improving the restaurant ordering process for busy diners and businesses is a great fit for Caviar and our commitment to helping restaurants grow,” said Gokul Rajaram, Caviar lead at Square. “This addition will accelerate Caviar Pickup and give more food ordering options to diners across the country.”
In addition to giving restaurants and customers new convenience, there’s a big benefit for Square, which can sell its software and hardware to manage the transaction. It’s important to continue the growth of Square’s on-demand food delivery service because it contributes to the slate of products that represented more than 25 percent of the company’s revenue last quarter.
OrderAhead started in 2012 and raised $10.5 million in venture capital from Y Combinator, AME Cloud Ventures, August Capital, Ignition Partners, Matrix Partners, Menlo Ventures, Sherpa Ventures, and angel investors, including Marc Benioff, Facebook chief technology officer Mike Schroepfer, and Quora chief executive Adam D’Angelo.
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