Restaurant365 devours $135 million to scale up software for restaurant industry

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Food prices continue to rise, but surprisingly, it hasn’t (yet?) exerted pressure on the restaurant industry as a whole. And now, a startup building technology to serve that space has announced a massive funding round to fuel its growth.

Restaurant365, which develops all-in-one restaurant management software, has announced a new round of funding of $135 million, co-led by KKR and L Catterton. Previous backers, notably his ICONIC Growth and Bessemer Venture Partners, also participated in the round, bringing his total startup funding to $288 million.

The company’s software covers accounting, analytics, staff and inventory management (but not POS solutions) and is currently used in approximately 40,000 locations, with customers including small businesses, franchises and chains, and restaurants. This includes accounting firms affiliated with The company plans to use the funding to continue developing products across all these areas.

It’s unclear if Restaurant365 is profitable, but they say it’s currently making about $100 million a year.

The Irvine, Calif.-based company, which was founded in 2011, hasn’t specifically disclosed its valuation, but in the words of CEO and co-founder Tony Smith, the company is currently worth ” It has reached $1 billion. A company spokesperson now confirmed to me that the company is indeed valued at over $1 billion. This is a big leap. In 2019, Restaurant365’s valuation was just over $305 million for him, according to PitchBook data.

Investors here are interesting and strategic. KKR and L Catterton, as his PE firms, both hold numerous stakes in the food service industry. Iconic and Bessemer are, more directly, the leading VCs in the world of technology investment.

“R365 has achieved continued and accelerated growth, which is a testament to our strong team who are passionate about changing the restaurant industry for the better,” said Tony, CEO and co-founder of Restaurant365. Smith said in a statement. “Whenever we receive funding, we perceive it as a privilege. We recently passed the incredible milestone of $100 million in sales and $1 billion in value and can’t wait to see what happens next.”

As the world continues to recover from the COVID-19 pandemic and the economic changes it brought, many believe the global and national economies are teetering on the brink of recession. The company’s capital injection took place. How consumers earn and spend money Ironically, however, the signals from those closely watching how restaurants operate seem to point in the other direction.

In its annual state of the industry report (from February 2023), the U.S. National Restaurant Association says the restaurant industry will grow to $997 billion in sales this year, although some of the 2022 headwinds will continue this year. said to predict. With 500,000 new jobs (a total of 15.5 million expected by the end of 2023 at pre-pandemic levels), consumers have a strong desire to continue going to restaurants during their leisure time. But not everything is completely rosy. Rising food prices, which are driving revenue growth, and the fact that more restaurants are popping up (increasing jobs) also mean more competition.

But all of this points to a broader potential audience for companies like Restaurant365, and (sorry) many others in the same space serving the same customers. These include Toast, Lightspeed, as well as Square, PayPal, and others. With many companies serving the restaurant industry reeling during the pandemic’s massive shutdowns, Restaurant365 has emerged as one of the technology companies to give customers the tools to weather the storm.

“Restaurant365 has shown compelling growth throughout its history and now powers more than 40,000 restaurants,” said Jimmy Miele, KKR’s Director of Tech Growth, in a statement. “In addition, their software plays a key role in helping many distressed operators keep their doors open during uncertain times. , and we look forward to helping even more operators achieve their highest potential.”

“L. Catterton has extensive experience investing in world-class restaurant brands around the world,” added Ian Friedman, partner at L. Catterton. “We believe Restaurant365 is the gold standard in the industry with deep insight into the day-to-day pain points of restaurateurs, helping them streamline their operations and increase profitability. We are proud to bring our technology investment experience to the team.” Friedman joins the board.

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