Video: Square acquires catering platform Zesty
Square is buying the catering platform Zesty in a move to expand its food delivery business Caviar with more corporate catering services.
Square said Zesty has built a robust platform with features designed specifically for large corporate food programs, including menu planning tools and algorithms, order management software, white glove catering logistics, and nutrition and allergen customization.
Square made its first foray into food delivery when it bought Caviar back in 2014. A big draw for Caviar was that it provided delivery from popular restaurants that do not otherwise offer delivery on their own. Since then, the business has helped Square grow its subscription and services-based revenue to nearly $80 million.
As far as corporate catering goes, Square launched a similar service called Caviar for Teams in 2016 as a way to let large teams order food from multiple restaurants. The addition of Zesty seems like a way to round out its existing services with full-fledged corporate catering.
"Expanding our corporate catering product with Zesty enables us to offer our restaurant partners another way to boost sales through higher-margin, large-format catering orders," said Gokul Rajaram, Caviar lead at Square. "Caviar is thriving, and we're excited to supercharge its success with Zesty and double down on an area with great opportunity to drive more growth for our business."
Square said Caviar and Zesty will operate independently as standalone businesses.
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By combining the two food delivery services, Square has created Caviar Fastbite, an upscale food delivery service that promises to bring curated dishes to hungry San Franciscans in as little as 10 minutes.
Transaction-based revenue was $525 million, up 30 percent year over year. Square also noted that it had more than seven million monthly active Cash App customers as of December 2017.
Square emphasized that Caviar's approach is a more affordable alternative to in-house delivery schemes that drives additional revenue.