Restaurant365 gobbles up $135 million to scale up its software for the foodservice industry

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the price of food keep going up and up but surprisingly that hasn’t (yet?) played as pressure on the restaurant industry in general. Now, a startup that is building technology to serve that sector has announced a large funding round to fuel its growth.

restaurant365which develops an all-in-one restaurant management software, Announced $135 million in new funding co-led by KKR and L Catterton. Previous backers, specifically ICONIC Growth and Bessemer Venture Partners, are also participating in this round, bringing the total raised by the startup to $288 million.

The company’s software, which covers accounting, analytics, workforce and inventory management (but not point-of-sale solutions), is currently used in some 40,000 locations, with clients including small businesses, franchises and chains, and accounting firms. who work with restaurants. It will use the funds to continue to develop products in all of those areas.

It’s unclear if Restaurant365 is profitable, but it currently generates about $100 million in annual revenue, he said.

The Irvine, CA-based company, founded in 2011, doesn’t disclose its valuation specifically, though a quote from CEO and co-founder Tony Smith notes that the company has now hit “$1 billion in value”; It’s not clear what value you’re talking about though (we’re trying to get in touch to ask). According to data from tone bookRestaurant365’s valuation was just over $305 million in 2019.

The investors here are interesting and strategic: KKR and L Catterton, as private equity firms, have a number of holdings that extend into the food service industry. (Iconic and Bessemer are more directly important VCs in the world of technology investing.)

“R365 has achieved continued and accelerated growth, which is a testament to our strong team that is eager to change the restaurant industry for the better,” said Tony Smith, CEO and co-founder of Restaurant365, in a statement. “Every time we receive funds, we recognize it as a privilege. However, the main driver of this round is the union with two strategic investors so intimately linked to the restaurant industry. Having recently passed exciting milestones of $100 million in revenue and $1 billion in value, we can’t wait for what’s next.”

The company’s injection of funds comes at a time when many believe the global economy, and those of individual countries, are on the brink of recession, as the world continues to recover from the Covid-19 pandemic and the changes it brought how consumers earn and spend money. But ironically, the signs from those watching closely how restaurants are doing seem to point in a different direction.

The US National Restaurant Association, in its annual report state of the industry report (as of February 2023), notes that while some of the headwinds of 2022 continue this year, the foodservice industry is forecast to grow to $997 billion in sales this year, with 500,000 new jobs. (to bring the total to 15.5 million by the end of 2023, post-pandemic levels), and a strong desire from consumers to continue going to restaurants in their spare time. It’s not all rosy, though: Rising food costs are driving those higher revenues, and the fact that more restaurants are springing up (more jobs) also means a lot more competition.

All of that points to a broader base of potential users for companies like Restaurant365, though, along with many others in the space that serve (sorry) the same customers. They include Toast, Lightspeed, as well as others like Square, PayPal, and more. While many of the companies serving the restaurant industry found themselves on their knees during the great pandemic shutdown, Restaurant365 emerged as one of the technology companies providing tools to help their customers weather the storm.

“Restaurant365 has demonstrated compelling growth throughout its history, now powering more than 40,000 restaurant locations,” said Jimmy Miele, director of Technology Growth at KKR, in a statement. “In addition, their software has played a crucial role in helping many struggling traders keep their doors open during uncertain times. We look forward to being a part of this next chapter, helping more operators reach their full potential.”

“L Catterton has a wealth of experience investing in world-class restaurant brands globally,” added Ian Friedman, Partner at L Catterton. “With an in-depth understanding of the day-to-day pain points of restaurant operators, we believe Restaurant365 is the gold standard in the industry, helping to streamline operations and increase profitability, and we are proud to leverage our technology investment expertise. and consumption as a partner to Tony and the team.” Friedman joins the board.