American Express is buying Squarespace-owned restaurant booking platform Tock for $400 million to expand its foothold in the dining industry, a category that accounted for $100 billion in spending on its cards last year.
The all-cash deal, unveiled on Friday, will build upon the credit card giant’s acquisition of online restaurant reservation platform Resy in 2019.
Resy helps AmEx cardholders get special access to some restaurants, including exclusive reservations, early notifications or cashback on certain bookings made through the platform.
The buyout of Tock will add another 7,000 restaurants, wineries and other hospitality businesses to AmEx’s network, and allow restaurants to better target AmEx’s premium customers who are typically prolific spenders.
The credit card giant has often offered more perks to justify charging higher annual fees than its rivals, a strategy seen as crucial to achieving AmEx’s growth targets by helping it appeal to affluent consumers and boost customer engagement.
“These experiences help serve as a distribution channel, as they drive new customers to the brand,” William Blair analyst Cristopher Kennedy wrote in a note.
AmEx is also buying Rooam, a contactless payments platform used by restaurants, bars, music venues and other businesses, for an undisclosed sum.
The acquisitions should support the company’s efforts within the small and medium enterprise market, Kennedy wrote. AmEx views the segment as lucrative despite a recent slowdown in their spending growth.
Website-design platform Squarespace paid around $400 million for Tock when it bought it in 2021, about the same amount that it will get from the sale.
The deal will turn Squarespace leaner as it prepares to be taken private by Permira in a nearly $6.9 billion transaction.
So far this year, AmEx shares have jumped 23%, compared with a near 15% jump for the benchmark S&P 500 index as of Thursday’s close.
(Reporting by Niket Nishant in Bengaluru; Editing by Shailesh Kuber and Devika Syamnath)
