

Food Delivery Startup Caviar In Talks To Be Acquired By Square - peterkchen
http://techcrunch.com/2014/07/12/caviar-square/

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gamblor956
_While it seems strange Caviar would seek to be acquired so soon after raising
funding, it’s possible that the competitive environment is just too much for
it to handle, and maybe it would do better to be part of a larger company._

In any other environment, a failing or non-competitive company would be
purchased for the value of its net assets. In this situation, that would be at
most $20 million and likely for less than $10 million. It's silly stuff like
this that convinces everyone outside of the SV echo chamber that the tech
market is looking at another bubble.

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2pasc
I don't know anything about this deal, but as far as I know Caviar has been
growing leaps and bound, with many new cities launched recently very
successfully in terms of order volume, etc...

Caviar's growth potential is really strong, (and they are not burning a lot of
cash at all - they were operating profitably in SF for almost a year): Grubhub
is stuck at the low end of the market, and there is a real opportunity to be a
true partner at the high end (which they are doing).

Disclaimer: I am a small investor in Caviar and shared an office with them for
4 months

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dmac
It's disappointing that a perspective with information from an insider
(investor) is down-voted on Hacker News. It's such inside perspectives and
unique insight that make Hacker News special.

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joemaller1
Honestly, I thought Square was kind of broke. Most of my contact with Square
is in small cafes and restaurants, making this pivot kind of bizarre. Why
would any food service company sign up for payment services with a company
that's also competing with them? Stripe should be all over that angle.

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saidajigumi
I've also seen a long-term upward adoption trend for Square in small
businesses in my area. Some of these are at their first-time accepting credit
cards, especially at local farmer's markets where Square's adoption has
increased from a fringe payments player to near ubiquity (>90%) over the past
three to four years. It's also been interesting to see an increasing trend in
businesses switching to Square from traditional wired or wireless credit card
systems.

Every time I hear that Square isn't doing well financially, my heart sinks a
bit. From my experience, it seems that they're nailing an underserved market
and greatly improving the experience for these small businesses and their
customers.

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sheetjs
> they're nailing an underserved market

There's a good reason the market is underserved. If it were wildly profitable
to operate in that space, you'd see many more players.

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dcpdx
I'm glad nobody told Larry or Sergey that before they started Google.

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sheetjs
Sometimes it helps to do a little research before trying to make a clever
retort. Wikipedia has decent coverage of search engines:
[https://en.wikipedia.org/wiki/Web_search_engine](https://en.wikipedia.org/wiki/Web_search_engine)
[https://en.wikipedia.org/wiki/Timeline_of_web_search_engines](https://en.wikipedia.org/wiki/Timeline_of_web_search_engines)

Go.com, Lycos, AltaVista, Excite, Yahoo!, Dogpile, Ask.com, Yandex and many
other search engines existed before Google entered. Most were wildly
profitable.

~~~
argonaut
Sometimes it helps to read the articles you link to. None of them show that
"Most were wildly profitable." In fact, those articles mention that search
engines before google struggled to make money.

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curiousgorge
I'm always curious as to who profits from a leak like this. is there ever any
interest from the company or acquiring party to leak this deal to the press
before it closes?

It's happened with Twitch and now Caviar, so i've started thinking through
reasons why it'd be in either party's interest to leak the deal. Any thoughts?
Or should I take my tin-foil hat off?

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hayksaakian
Interesting that Square is looking for acquisitions in the industry. Payment
processing by itself always lacked tangible lock in.

From another article:

> TechCrunch understands from a reliable source that Square was a “serious
> bidder” against Google for Appetas, a restaurant website building platform
> Google just acquired.

[http://techcrunch.com/2014/05/12/with-new-food-app-square-
or...](http://techcrunch.com/2014/05/12/with-new-food-app-square-order-square-
wants-a-bigger-bite-of-the-restaurant-industry/)

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zachlipton
Exactly. Square is trying to build up a collection of services to offer local
businesses, especially restaurants, of which payments is just one. Google has
been playing in the same game, with the main aim of selling ads to local small
businesses, but hasn't really moved fast enough in pushing payments.

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o0-0o
Caviar is the only reason to order food in Manhattan. Time after time, they
have done the right thing by me. They are on the top of the charts with
customer service and relationship management. They could seminar school 99% of
businesses out there on how to do right by people. And, this says nothing
about the quality of the restaurants they provide. Truly world class, and I
hope the GPs make a killing on their equity stake. ;p

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mandeepj
Was n't there a news recently that Square is losing millions of dollars and
struggling to survive? There were some buyout rumors also.

May this be Caviar acquisition talk is kind of survival step by Square to
diversify into other areas.

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kaltsturm
Short question with regard to their marketing. How did they start? How do they
do marketing? I am just wondering how they did that good job in such
competitive landscape. Thanks. Best regards.

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2pasc
Initially their growth was only word of mouth (and leveraging networks of
Companies using them to order food for lunch).

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rokhayakebe
If you acquire a company with $x million in cash. How is the money handled?

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stock_toaster
It is just another asset of the company being acquired, like a desk or a
chair. As part of the acquire agreement, they may be required to pay down
existing debt with any cash on hand or something too? Just guessing.

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MattLaroche
The actual headline is "Curated Food Delivery Startup Caviar In Talks To Be
Acquired By Square For $100 Million" \- this isn't a done deal.

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dang
Thank you. We changed it.

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MattLaroche
Thanks for updating it. Wasn't sure if TC had changed it, or if the poster was
editorializing.

