- US restaurant-management software startup Restaurant365 has secured $135 million in funding.
- KKR and L Catterton co-led the round, which also includes previous backers ICONIQ Growth and Bessemer Venture Partners.
- Restaurant365 will use the funds for “produce enhancements” to its Restaurant365’s Accounting, Store Operations, Workforce, and Intelligence product suites.
Why it matters:
Restaurant365’s software manages back-office tasks at restaurants such as accounting, inventory, and purchasing as well as staff-related items like hiring and scheduling workers.
The Irvine, California-based company says its software is in around 40,000 locations that include small and large restaurants and chains. Accounting firms that work with restaurants also use Restaurant 365’s software.
Restaurant365 has “recently crossed exciting milestones of $100 million in revenue and $1 billion in value,” co-founder and CEO Tony Smith said in a news announcement.
The size of the round bucks the general funding decline for agrifoodtech, as outlined by AgFunder’s Global AgriFoodTech Investment Report 2023. While these declines are in line with general venture capital, many downstream (aka close to the consumer) agrifoodtech startups have borne much of the burden.
Funding declined more than 35% for meal delivery, eGrocery and cloud retail categories, for example, while major restaurant chains are shifting away from ghost kitchen strategies as the format loses steam.
But it’s a slightly different narrative for In-Store Retail & Restaurant Tech, the AgFunder-defined category in which Restaurant365 sits.
The category raised $3.6 billion in 2022, down from $4.2 billion in 2021. However, removing 2021 — an outlier year for all of agrifoodtech investment — reveals growth for the category, which raised $2.4 billion in 2020.
Back-office management tech is less flashy than, say, celebrity-owned virtual restaurant brands, but it’s undoubtedly more valuable in the long term as it gives restaurant owners/operators a more complete view of the costs of their operations. This was critical to surviving the pandemic. Rising labor wages and soaring food prices in 2023 are proving equally challenging for restaurants, which need more granular data about the cost of their operations.
Speaking to that point, Jimmy Miele, director, Tech Growth at KKR, said in a statement that “[Restaurant365’s software has played a crucial role in helping many struggling operators keep their doors open during uncertain times.”
Ian Friedman, partner at LCatterton, added that the Restaurant365 platform offers “deep insight into the everyday pain points of restaurant operators,” among other things.
Both KKR and L Catterton have multiple other restaurants and restaurant tech companies in their portfolios, making the Restaurant365 investment a strategic one for the firms.