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Daily news and analysis about the food tech revolution

Hungry

Corporate Catering Service EAT Club Acquires Taro, Launches Zero-Carbon Program

Corporate lunch-delivery service EAT Club announced today it has acquired Bay Area-based meal delivery service Taro. Terms of the deal were not disclosed.

EAT Club, who currently serves San Francisco, Silicon Valley, and Los Angeles, bills itself as a “virtual cafeteria” that delivers meals to offices, among them Facebook and Postmates. Workers can log onto the digital menu and choose from sandwiches, salads, wraps, and hot entrees which range between healthy (salmon salad) and hearty (turkey club). One person can input all the orders into EAT Club’s website or app, or invite individual employees to add to an order. Once an order is placed, Eat Club will then notify users when the food has arrived, and where it’s been set up (e.g., the conference room).

EAT Club previously had operations in NYC, too, but suspended those in August of 2018, seemingly due to how saturated the corporate catering space is in that city. Prior to that, the company acquired Farm Hill, another corporate catering service.

Taro, meanwhile, is best known for its “homestyle” Indian, Korean, and Chinese fare that also prioritize healthy, fresh ingredients. The company did a $2.8 million venture round in December of 2017.

For EAT Club, Taro brings its proprietary recipes as well as some new technology to the table with this acquisition. In particular, Taro’s distribution tech attracted EAT Club, though details are few and far between as to what exactly Taro has: “They’ve built some really interesting things we want to keep competitively secret on the equipment side,” EAT Club CEO Doug Leeds told TechCrunch.

As digital tech makes it easier to facilitate, ordering, payment, and delivery of corporate lunches, the number of startups popping up to serve this demand keeps growing. Besides EAT Club, Chewse, also in the Bay Area, recently raised $19 million for its “family-style” meals. ezCater just raised $100 million in a Series D round, and Hungry, which connects companies directly to the chef, raised $1.5 million and services areas like Virginia, Washington D.C., and Maryland.

According to the press release, EAT Club and Taro teams will integrate moving forward.

EAT Club also announced today, via a different press release, a Zero Carbon Initiative to invest in renewable energy and support carbon recapture projects. To do so, EAT Club is teamed up with sustainability consulting firm 3Degrees, with whom it’s building a “custom renewable energy and carbon offset program.” The program will match all of EAT Club’s electricity usage with renewable energy generation. It will also make its packaging recyclable or compostable. Leeds told TechCrunch that the company’s biggest environmental impact thus far is with transportation. Given that Taro has some technology secrets aimed at distribution up its sleeve, it’s possible some of the assets EAT Club just acquired could go towards helping lessen that footprint and find a more eco-friendly way to deliver lunches to the corporate world.

Hungry Raises $1.5M for its Chef-Centric Corporate Catering

There are a lot of things going against corporate catering startup Hungry. It’s based in Virginia, not Silicon Valley or New York or some other major tech hub. It only services select parts of D.C., Maryland and Virginia. And though the company just raised a $1.5 million seed round, that amount is tiny compared with competitor ezCater, which this week raised a whopping $100 million.

But one thing Hungry does have going for it is their approach to providing meals for office workers. Whereas most business catering services act as brokers between companies and restaurants, Hungry connects companies with independent chefs. And these aren’t just ordinary chefs; they’re former White House chefs, Iron Chef and Chopped champions, and James Beard Award winners.

Clients can visit the Hungry website and peruse the chefs in its network, along with the menus they serve. They can then select a chef/food combo and order up to 24 hours in advance. Chefs give Hungry their max capacity of meals per day and if that number is hit, they’re temporarily hidden from the site until they can catch up. Hungry then sends its “captains” out to pick up the food from the chefs’ kitchens, then deliver and set it up at the client’s office.

Hungry Founder and COO Eman Pahlevani explained to me why he thinks his company’s chef-centric approach is a better one for corporate catering:

Hungry’s network of 50 chefs all work out of commercial kitchens, so they don’t incur the hefty costs associated with a full restaurant. Hungry only offers breakfast and lunch, so chefs have better hours and are done at noon. Hungry takes care of new customer acquisition and delivery, so chefs can focus on food. The service also cuts down on food waste because chefs know how many orders they need to prepare in advance and stock up accordingly.

For clients, Pahlevani said that because they chefs have less overhead, they can charge less, which means that clients pay less for lunches. Plus each delivery captain works with the same clients each time, so they know where to unload and set up, minimizing hassle for the office manager.

Hungry currently has 300 clients including Amazon and Microsoft. They have 50 chefs in its network, who, according to Pahlevani, average about $10,000 to $12,000 a month in revenue. Hungry makes its money by marking up the wholesale menu prices set by the chef.

Yesterday’s $1.5 million brings the total amount raised by Hungry to $4.5 million. The company plans to use the money to expand into a new market — most likely Philadelphia — by the end of this year.

As we’ve noted, the corporate catering market is both frothy and in flux at the moment. In addition to the aforementioned ezCater raise, both ZeroCater and Platterz have raised double-digit million rounds this year. But at the same time, you see some retrenchment as Square acquired Zesty, EAT Club acquired Farm Hill and Peach laid off 33 percent of its staff.

Hungry may not have the war chests of its rivals, but it’s at least got an interesting approach. Now we’ll see if people in other parts of the country are hungry for it.