EzCater secures $150M in funding, surpasses $1.2B valuation
- ezCater, an online catering marketplace, has raised $150 million Series D-1 funding co-led by Lightspeed Venture Partners and GIC, bringing the company’s total funding to $320 million, according to a press release emailed to Restaurant Dive.
- The company, which serves more than 60,000 restaurants and caterers, plans to use this new funding to continue expanding, which will likely include acquisitions, entering new international markets within the next 12 months, and adding product features, CEO and co-founder Stefania Mallett told Restaurant Dive in an interview.
- The company's valuation is now more than $1.2 billion, Mallet said.
This significant funding round highlights a growing trend of more restaurants adopting technologies to improve upon their operations. Alongside the growing off-premise segment, a catering tech platform is particularly meaningful.
This strategy makes sense considering how quickly the catering industry is growing. The segment makes up nearly $60 billion, according to Technomic. It's growing 50% faster than the overall restaurant industry, according to the press release.
"Catering has always been valuable to restaurants because there is no waste," Mallett said.
If a customer orders food for 38 people, the restaurant prepares for that amount and if that amount doesn’t show up, the extra food is the customer’s responsibility, she said. Comparatively, a restaurant has to make an educated guess on how much it will need to order three days from now and could end up eating the leftover food if weather or other factor impacts traffic, she said. Many restaurant chains have been taking note of catering's potential, and chains like Chuy's, Olive Garden, Cracker Barrel and Red Robin are growing catering sales sometimes in the double-digits.
A bulk of catering sales — about $36 billion — still go toward social gatherings.
"In social settings, you used to cook when guests came over," she said. "Now you can buy a tray of food or use restaurant catering."
Catering has also become popular among office workers to help provide an extra element for business meetings, she said. This segment of the industry makes up about $22 billion in catering sales, according to Technomic.
"We as a society have come to use food as a sales tool," she said
Offering lunch or food during business meetings can also save time, freeing up the lunchtime hour for meetings instead of waiting for employees to return from lunch, she said.
While catering creates a big opportunity for restaurants, it can also be a bit of an undertaking. Restaurants need to find their customers through marketing and sales, figure out how to actually prepare for a catering order — especially if the restaurant is also preparing dine-in meals and individual orders — and how to deliver the order to the customer, Mallett said.
ezCater can help with the first and third challenge in catering by offering marketing and a means of delivery, ezDispatch, which launched in May. Restaurants can either use their own vans to deliver or use local couriers that partner with ezCater to help deliver, Mallett said.
Going forward, the company plans to keep growing, and five years from now, Mallett expects the firm to be 10 times its current size, especially since it has been doubling every year and is rapidly growing its staff and capabilities. Given the trajectory of off-premise, this could be an attainable goal.
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