Large-format catering orders may not grab the same headlines commanded by third-party delivery services at the moment, but it's a buzzing and important part of many restaurants' off-premise strategies.
— Kristen Hawley
Q: When is a restaurant more than just a restaurant?
A: In 2019, as businesses often require multiple revenue streams to stay ahead. As we’ve heard again and again, a robust off-premise strategy can make a huge difference in a restaurant’s bottom line.
Thanks to the soaring popularity and promise of off-premise sales, the restaurant-tech industry has its latest unicorn. EzCater, an online catering marketplace and software company, today announced a $150 million Series D-1 round of funding, co-led by Lightspeed Venture Partners and GIC. The latest round values the business a $1.25 billion.
Catering provides huge value to restaurants for a few reasons, but the biggest is the bottom line. “It’s profitable. There’s no waste in catering,” said Stefania Mallett, EzCater’s co-founder and CEO. “If I order for 38 people and I pay for 38 people, the restaurant prepares for 38 people and the restaurant gets paid for 38 people.”
The white-hot, tech-fueled delivery market may be grabbing headlines and consumer attention, but catering, a decidedly less flashy segment of off-premise business can have big payoff, too. According to 2018 Technomic data, catering is a $61.5 billion industry, with some restaurants seeing nearly a quarter of their revenue from catering orders.
In fact, it’s a valuable enough segment that EzCater’s strategy is to digitize restaurants’ current catering operations, not necessarily drum up new business. “We go to restaurants that we know are catering. Or we are approached by restaurants that are getting into catering and want us to be their marketing arm. We don’t attempt to convince someone who’s not already catering to get into it,” Mallett said.
The company currently works with 60,000 restaurants and caterers from small independent operations to large-scale restaurant companies like Schlotzsky’s. Both order volume and dollars spent is a near 50-50 split of chain and independent restaurants, according to Mallett.
The new round of funding, announced less than a year after a previous $100 million raise, will help the company expand internationally and improve its restaurant-facing software, dubbed ezManage. Last week, EzCater announced it had acquired Monkey, its top competitor in the catering management software space.