San Francisco (AFP) - US food delivery startup DoorDash announced Thursday it was acquiring crosstown rival Caviar in a deal valued at $410 million.
San Francisco-based DoorDash said it made the cash-and-stock deal with Square, the digital payments firm led by Twitter founder Jack Dorsey, which acquired Caviar in 2014.
While both firms offer on-demand delivery from restaurants online and using smartphone apps, they have different geographic "footprints" and restaurant partnerships.
"The addition of Caviar's premium restaurants, with whom DoorDash will work closely to drive their growth, will enable the combined organization to cater to every food preference and occasion," a statement from the companies said.
"Caviar's complementary geographic footprint provides DoorDash with a significant number of new and unique customers, who will benefit from an even broader set of merchants."
Tony Xu, CEO of DoorDash, said the deal "is another important step forward on our mission to empower local economies. We have long-admired Caviar, which has a coveted brand, an exceptional portfolio of premium restaurants and leading technology."
The statement indicated DoorDash would pay for the deal with cash an preferred stock, without offering details.
Dorsey, who is CEO of both Square and Twitter, said that "partnering with DoorDash provides valuable and strategic opportunities for Square."
DoorDash, founded in 2013 by Xu and two other Stanford University students, serves some 4,000 cities in the United States and Canada and reaches some 80 percent of US households.
DoorDash was in the news over a tipping policy that allowed the company to use consumer tips to make up base pay for its delivery contractors, a policy that was later modified.
Caviar served "thousands of restaurants in hundreds of cities across the US," according to the statement.
The firms compete with a number of delivery rivals in the US market, including Uber Eats and Grubhub.