Zesty expands Caviar’s corporate business
Square (SQ) is set to release its third-quarter results at a time when Caviar is taking a position as a key piece of its omnichannel strategy. Caviar is able to serve customers across different channels, such as physical locations and digital platforms. In an interview with CNBC last month, outgoing Square CFO Sarah Friar discussed the company’s efforts to bring the omnichannel experience to restaurants through Caviar.
Caviar is Square’s online food ordering and delivery service. It has recently expanded into corporate catering through the acquisition of Zesty.
Caviar revenue doubled
Through Caviar, Square competes with the likes of GrubHub (GRUB), DoorDash, and Uber for market share in the restaurant meal delivery market. The US food delivery service market is on track to hit $15.5 billion by 2022, up from $8.5 billion in 2017, according to Pentallect.
Square doesn’t break out its Caviar revenue, but it reported that revenue from the business more than doubled from a year earlier in the second quarter. GrubHub’s revenue rose 51% YoY (year-over-year) to $239.7 million in the second quarter. Last year, GrubHub bought Yelp’s (YELP) delivery business, Eat24, to in an attempt to strengthen its position in the food delivery market. Groupon’s (GRPN) revenue fell 6.8% YoY in the second quarter.
Caviar is a component of Square’s Subscription and Services segment, where revenue rose 127% YoY to $134 million in the second quarter.
Leveraging partnerships to drive growth
In the race for revenue in the payment processing and online food ordering and delivery markets, providers are taking to partnering to strengthen their positions. Square has partnered with Upserve to expand its small business lending beyond its customer base, and in July, it announced that it had tied up with eBay (EBAY) on a similar program.
On its part, GrubHub recently partnered with Blue Apron (APRN) to deliver the latter’s meal kits. Blue Apron is looking to expand its meal kit delivery service, and Caviar may be a potential partner.