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The Spoon

Daily news and analysis about the food tech revolution

corporate catering

Corporate Catering Service ezCater Raises $100M, Eyes International Expansion

Online business catering service, ezCater, has raised $100 million in Series D funding, the company will announce on Tuesday. The new investment is led by Wellington Management Company with participation from existing investors ICONIQ Capital, Insight Venture Partners and others. This brings the total amount raised by ezCater to $170 million.

EzCater’s marketplace connects businesses with catering services and restaurants across the county, as well as offering a suite of products to help restaurants receive and manage orders and deliver large scale meals.

In a press statement, ezCater says that it will use the new funding to “deepen its products, and expand internationally.” According to VentureBeat, ezCater has not announced which countries will will expand into first.

The money also makes a very public statement that ezCater is not going anywhere anytime soon. This could be important to winning new and keeping existing clients as the corporate catering sector appears to be entering a state of flux. In just the past few months, Square acquired Zesty, EAT Club acquired Farm Hill, and Peach laid off 33 percent of its staff.

Plus, the sheer size of the round could put added pressure on rivals such as Platterz ($21.7 million raised), ZeroCater ($17.6 million raised), and Forkable ($813,000 reported, but final amount raised unknown), all of whom can now be outspent by ezCater.

As we’ve said before, there isn’t much corporate catering services can do to differentiate themselves to customers. At the end of the day, companies are trying to keep employees happy and employees don’t care who delivered the meal, only whether or not the food is good and on-time. EzCater’s war chest will now tubocharge its scaling, and help it outlast (or acquire) its smaller competition.

Peach Lays of 33 Percent of Staff

Peach, the Seattle-based corporate lunch delivery service, has laid off 33 percent of its staff, according to Geekwire, which broke the story.

Peach CEO Nishant Singh told Geekwire the layoffs were a result of a “sales experiment” wherein the company ratcheted up its sales efforts. Evidently that didn’t pan out and Peach let go of roughly a dozen employees.

The Peach news comes at a time of adjustment in the corporate catering sector. Last week EAT Club acquired Farm Hill, and last month Square bought Zesty for its Caviar catering service.

I use the term adjustment instead of retraction as there is still money going into corporate meal delivery. ZeroCater raised $12 million this month, and earlier this year Canada-based Platterz raised $15 million (USD).

The difficulty for any startup in the lunch delivery space is that there really isn’t a huge point of differentiation around which you can build your company.

Other than competing on price — or perhaps a slightly better user experience — there are not a whole lot of opportunities to innovate. People order food. Food gets delivered. Food gets eaten. Repeat. Office workers will care more about the food that’s delivered than who delivered it.

Layoffs suck. But Peach, which has raised $10.7 million, said the layoffs would return the company to profitability. If it is profitable, the reduction in headcount could make Peach a more attractive M&A target.

UPDATE: An earlier version of this article incorrectly stated that ZeroCater made their own food for delivery. We regret the error.

EAT Club Acquires Farm Hill, Gets New CEO

Corporate meal provider EAT Club announced today that it has acquired another corporate catering service, Farm Hill. According to the press announcement, the acquisition will extend EAT Club’s reach and accelerate growth. Terms of the deal were not disclosed.

Farm Hill focused on providing meals the SMB market, and was founded in 2013, launching from the Stanford StartX Accelerator Program. Prior to the acquisition, Farm hill had raised $5 million in funding. As of now, the company’s site has been taken down with just a message saying “We’re cooking up something special for you…stay tuned for what’s next from Farm Hill!”

We reached out to EAT Club to see how many Farm Hill employees will be moving over to EAT Club, and will update this story as we learn more. UPDATE: EAT Club sent us the following statement via email: “We’re currently evaluating the strengths of both teams and determining the best course of action for our business needs.”

Available in the Bay Area, Los Angeles and New York City, EAT Club differentiates itself by allowing workers to each order their own individual meals (instead of a big trays of food), which are all delivered at once. Unlike other corporate catering services who simply broker food from restaurants to offices, EAT Club controls every step of its solution: taking orders, making meals and handling delivery. EAT Club has raised $50 million since its founding in 2010, and says that it serves 20,000 individualized meals a day.

EAT Club also announced today that it has brought on Doug Leeds as it’s new CEO (it’s third since 2016). Leeds was an executive in residence at August Capital (an EAT Club investor) and formerly the CEO at IAC Publishing.

There’s been a lot of activity in the corporate catering space as of late. ZeroCater raised $12 million earlier this month, and last month Square acquired Zesty.

Expect more consolidation like this as EAT Club brawls in the fight club among startups to deliver corporate meals to hungry workers.

ZeroCater Raises $12 Million to Satisfy Office Snacking

ZeroCater, a startup that provides office catering and snack services, announced yesterday that it has raised a $12 million Series B round of funding. The round was led by Cleveland Avenue, with participation from Romulus Capital and Struck Capital, and brings the total amount raised by the company to $17.6 million.

A post on the ZeroCater corporate blog said that the new funding will go towards expanding into new markets, increased menu and snack variety, and new hires. According to TechCrunch, ZeroCater wants to bolster its snack and drink offerings available in the fridge and pantries of offices in a bid to compete food service companies like Aramark.

While it attempts that, ZeroCater still has to fend off the raft of other startups looking to feed hungry office workers throughout the day. Just last month, Square augmented its Caviar food delivery by acquiring Zesty. In February, Canadian company Platterz raised $15 million (USD) for its “predictive meal builder” corporate catering. And outside the lunchroom, Byte offers smart fridges for offices healthier snack options.

ZeroCater told TechCrunch that it wants to provide companies with tools that offer deeper insights into worker preferences, and also give companies more granular control over exactly what food items are purchased for maximum enjoyment.

With all these eating options available to people who sit at their desks all day, perhaps a little more funding needs to go into corporate exercise routines.