Freshly public food delivery service Waitr is acquiring rival delivery service Bite Squad for $321.3 million in a combination of cash and company stock, the company announced today. The acquisition will expand Waitr’s footprint to 500 cities in 22 states, essentially doubling the size of the company.
As of September 2018, Waitr operated in approximately 40 markets stretching across 235 cities and counted 7,700 restaurant partners and 842,533 active diners on its platform. The acquisition will increase Waitr’s reach dramatically, as Bite Squad counted 11,000 restaurant partners and 889,000 active diners on its platform at the time of the deal.
“We’ve been keeping an eye on Bite Squad since they started out, and have seen them make incredible progress since then,” Waitr CEO Christopher Meaux said on a conference call discussing the acquisition.
Waitr’s footprint currently only overlaps with Bite Squad in five markets.
“We are thrilled to join forces with the Waitr team,” Bite Squad CEO Kian Salehi said in a statement. “I believe Chris and his team share our vision for providing hungry diners with a convenient and fast way to enjoy great food from the best local restaurants and chains.”
A Complementary Business
Like Waitr, Bite Squad operates on a slightly different business model than most of the nationwide delivery players. Bite Squad was founded in 2012 in Minneapolis, Minnesota and developed market share in second and third-tier markets across the U.S. first, instead of large urban areas. The company’s drivers are W-2 categorized, uniformed employees as well.
“We have followed Bite Squad’s growth and success for many years and believe their mission, business model and growth profile share many similarities to Waitr,” Meaux said in a statement. “We believe that a small fraction of the U.S. restaurant industry’s sales are from off-premise online transactions and this is evolving rapidly. This acquisition will help us drive additional growth and provide a step function increase in scale throughout the U.S. in order to better serve that developing market.”
Bite Squad will remain a standalone brand for “the foreseeeable future,” maintaining its own technology, operations, and employees, according to the company.
Meaux had hinted previously that the company was on the hunt for acquisitions to boost its market share after going public on the Nasdaq exchange in November 2018 and taking an $85 million round of financing from Luxor Capital Group.
“We believe that there is some opportunistic acquisitions out there that we could do in the future that would help us grow through acquisition,” Meaux said in a previous interview. “We’ll look at those opportunities when they come along.”
Meaux noted on the conference call that there are other small delivery companies that Waitr isn’t ruling out for further acquisitions in the future.
The deal is expected to close in January 2019.
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