Dive Brief:
- DoorDash has agreed to acquire hospitality software company SevenRooms for $1.2 billion in an all-cash transaction, according to a Tuesday earnings release.
- The deal is expected to close in the second half of this year depending on customary closing conditions and regulatory approvals. The companies will continue to act independently until the deal closes.
- After closing, DoorDash will grow SevenRoom’s portfolio with sales and product features and build upon the company’s existing operational and marketing platforms.
Dive Insight:
While DoorDash has expanded its product suite through in-house innovations, this is the first time since 2022 that it has bought a software company. That year, it purchased Bbot, a hospitality tech startup that simplified digital orders and payment processes. Prior to that acquisition, it purchased robotics firm Chowbotics in 2021 and Scotty Labs, an autonomous vehicle startup, in 2019.
The SevenRooms buyout will extend DoorDash’s reach to over 13,000 dining, hotel, nightlife and entertainment venues globally, according to a press release. SevenRooms works with various full-service companies, including Union Square Hospitality, Wolfgang Puck, NoHo Hospitality and The Madera Group, that would help DoorDash extend further into the fine dining restaurant space.
Of particular note, SevenRooms works with various hotel companies like Marriott International, MGM Resorts and Mandarin Oriental Group, which could allow DoorDash to enter the hotel space. Rival Grubhub has been growing its presence in the hotel segment for years, offering delivery services to various hotel firms, including Hilton and Choice Hotels.
SevenRooms was founded in 2011 to offer marketing, operations and guest experience tools to the hospitality industry to help improve guest relationships, boost operations and drive revenue growth, according to the press release. Its product suite includes reservation, waitlist and table management as well as revenue management and marketing tools like review aggregation, revenue management, referrals, email and texting and marketing automation.
“With an operator-first mentality at our core, we’re excited to embark on this next chapter with DoorDash – delivering greater innovation, a direct channel to a network of millions of DoorDash consumers, more personalized guest relationships and elevated experiences that transform first-time diners into loyal regulars,” Joel Montaniel, SevenRooms co-founder and CEO, said in a statement.
Under DoorDash, SevenRooms will be able to expand its resources and international reach as well as “[accelerate] its innovation roadmap” and create more value for its customers, according to the press release.
On Tuesday, DoorDash also said it entered into an agreement to buy Deliveroo for about $3.9 billion in a deal that would expand its presence into nine new countries.
