DoorDash buys SevenRooms for $1.2 billion
What does a delivery want with a reservations service? Cue a future battle of the restaurant superapps.
DoorDash, the app best known for delivering food from restaurants, is acquiring SevenRooms, a reservations and customer relationship management service, for $1.2 billion in cash. The deal is expected to close before the end of the year, subject to regulatory approval.
The news — which arrived a full day earlier than I expected after DoorDash moved up its first-quarter earnings release at the last minute — caps off a few weeks of rampant speculation in the group chat where I debated the merits of this move1. The consensus among those I asked seems to be that DoorDash will benefit from SevenRooms’ strong international presence — including Australia and Asia — and robust customer relationship management tools, like an AI-assisted texting feature to help drive business.
This is probably correct. A rep for DoorDash calls the deal “a strategic move to deepen DoorDash’s support for global restaurants.”
Then, during the company’s earnings call with investors and analysts this morning, DoorDash CEO Tony Xu explained more about the company’s decision to peruse the acquisition:
“In the case of SevenRooms, it's really about adding to our platform business. So our commerce platform started in 2016 when we introduced DoorDash Drive. Later on, we introduced DoorDash Storefront. So we went from logistics as a service to online ordering as a service. And with something like SevenRooms, and especially what we hear all the time from merchants, is this desire to understand everything that's actually happening about their guests and inside their dining rooms, as well as their other channels. And so really, you can almost view this as marketing as a service and adding more intelligence into what restaurant owners can do in order to build their strong direct relationships with guests.”
DoorDash and SevenRooms partnered previously in the fall of 2022 as DoorDash tested an in-app reservations feature (first reported in this newsletter!) that didn’t take off. At the time I called it “the partnership I should’ve seen coming” as the delivery service worked to insert itself into as many restaurant transactions as possible. Still, the handful of industry execs I asked on background said that it’s not a perfect fit. (“I really don’t get it,” one executive texted me this morning.)
In a statement, Joel Montaniel, SevenRooms co-founder and CEO, said he’s excited about the move. “Together, we're equipping restaurants with the tools to own the guest experience, grow their customer base, and thrive in an omnichannel world – inside and outside of the merchant's four walls,” he said.
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The hypothetical group chat; there is no restaurant technology cabal — though if there is, I’d like to be invited, thanks.