Should DoorDash buy Olo? $OLO's share price has never been lower. After hitting a saturation point in the enterprise segment, growth has slowed. There's a clear market shift to all-in-one solutions like $TOST. Pure middleware companies are now a commodity, with most consolidating into ordering & makreting platforms. There's also the constant threat of enterprise brands building their own tech stack. Meanwhile $DASH has been ramping its investment in 1P ordering channels through: 1/ The acquisition of Bbot 2/ Adding 3rd party loyalty integrations with its Storefront platform 3/ Building a mobile application to pair with Storefront web ordering SMB restaurants have been quick to adopt Storefront due to the no SaaS fee model and simplicity of activation when they're already on the marketplace. However, I suspect $DASH has struggled to break into the mid-market & enterprise segment with the lack of features these segments require. The above moves signal $DASH positioning itself to go upmarket from the SMB segment. Buying $OLO would add complementary SaaS revenue and strengthen $DASH position with enterprise brands. Plus, I’ve heard some chatter from sources that private equity 🦈 s are circling, potentially taking $OLO private. If $DASH wants to make a power move, this might be it.
Seth Cohen
4mo
probably would be a lot of friction between olo's mission and what DD stands for. OLO is all about empowering brands/operators with guest data whereas DD (and other 3rd party delivery companies) hide and protect customer data at all cost. of course, this dynamic is shifting with DD investment and interest in 1st party (more data and more transaction volume for DD) but it would be a shame to see a company like OLO succumb to an acquisition by a 3rd party delivery provider which is hurting restaurants more than they are helping 😬 . I'd rather see OLO partner or be acquired by a company like $TOST which is having trouble making a dent in enterprise but can turbocharge OLO's mission and reason for being. seems like a better fit and potential win/win scenario.
Jeremy Theisen
4mo
Winning business and buying business (in a tough economy for brands) are not one in the same. Need to see if DoorDash can win business and charge for it. I’ve spoken to a number of brands that have made a jump because they bought the business (feels like beverage industry). This is zero chance Olo would sell in my opinion. Toast is also a bad example as “all in one” solutions have always been the preference for SMB.
What makes you say that there is a clear market shift to all-in-one's?
Judith Metviner
4mo
Super interesting take... but as someone who worked at Olo for several years, I don't think it will ever happen. As Seth mentioned below, they have two competing business models and I think an acquisition from Toast would make more sense.
Matt Albano
4mo
Very interesting take. Would be a smart investment for a variety of reasons. It would prevent them from having to shell out the exorbitant fees Olo charges to their partners. Old article but still relevant: https://emerging.com/insights/uncategorized/olos-ipo-and-a-disgruntled-doordash
John DiLoreto
4mo
This is Spicy
Scott Lawton
4mo
One of the key differences between Olo and Toast is that you get to own your customers data. I'm not sure how Doordash or Toast would reconcile that part. They are both very strict about the fact that they own the customer not you.
There's so much to discuss but it's not ready for public disclosure. Olo has underperformed its public, restaurant vending peers (PAR, TOST, LSPD) yet every company I listed has swapped CEOs. Why? Business Judgement Rule only extends so far, and as a number of derivative claims will make clear, there's a well established pattern of fiduciary breach to maintain control. It's too bad shareholders weren't made aware in the S-1.
Why has OLO stock struggled for so long?
Co-Founder @ Spice 🌶️ | Growing food brands online
4mojust going to leave this here on OLO https://guastywinds.substack.com/p/olos-dilemma-part-1