DoorDash is announcing the acquisition of Rickshaw, a Y Combinator-incubated startup that helps businesses offer same-day delivery by connecting them to a courier network and managing the logistics.
DoorDash has been developing a similar platform called Drive, which allows customers to use DoorDash’s network to make deliveries beyond DoorDash’s consumer website and app.
Meanwhile, Rickshaw CEO Divya Bhat said she’d built a profitable business in Los Angeles and the San Francisco Bay Area with a “super small, scrappy team” of just four full-time people. However, as they looked at raising a Series A and expanding, she said it would mean “taking a big step back and building a bunch of generic infrastructure.”
Since they already knew the DoorDash team, and since they saw a similar vision behind Drive, the acquisition looked pretty appealing.
“It was a really natural fit,” Bhat said.
The financial terms of the acquisition were not disclosed, but three Rickshaw team members will be joining DoorDash. In a blog post, DoorDash CEO Tony Xu described this as “an acquihire.”
“A lot of the know-how and software behind Rickshaw and what they’ve built certainly will be applied very directly to our Drive product,” Xu told me. “At the same time, this is fairly complicated … It’s not just a copy-and-paste” — so he said there will be careful consideration to do things “the right way.”
The Rickshaw service will be shutting down, and Bhat said her team will be talking to existing customers about finding another product to meet their needs. Depending on the customer, that product may or may not be DoorDash Drive — Bhat said it’s “different enough that it wouldn’t make a great full transition.”