Corporate food startup EzCater Inc. is worth $1.6 billion after raising $100 million in a funding round led by SoftBank Vision Fund 2, according to a statement reviewed by Bloomberg News.
That valuation increase from $1.2 billion in 2019 when it last raised money follows a change in the Boston-based company’s customer base after the coronavirus pandemic altered the habits of office workers.
Pandemic lockdowns had sent the business into a spiral, forcing it to cut half of its 1,000-person workforce and to put its plans to go public this year on ice, said co-founder and Chief Executive Officer Stefania Mallett.
“We got slammed by Covid,” Mallett said in an interview. “But this funding is a great vindication of how we are a much stronger company.”
Before the pandemic, EzCater had relied on companies with big in-person workforces for most of its business. When office workers starting logging on remotely in March 2020, its sales plummeted 85% in one week, Mallett said.
The company has since shifted its focus to industries involving essential workers whose jobs must be done on site, such as health care, retail and manufacturing.
“With this additional cash, we can expand and go deeper into more of these verticals that are pretty solid against any increase in omicron,” Mallett said, referring to the latest coronavirus variant.
The company’s software is used to order meals from caterers and restaurants for employees, to help power what Mallett calls a virtual cafeteria. As companies try to lure their workers back to the office, free meals have become a more-common perk, she said.
“Workplaces of all sizes are ordering food much more frequently to get people to the office, to foster connection — and because employees have come to expect it,” said Mallett, who started EzCater with her business partner in her kitchen.
EzCater, operating in 32 states, competes with traditional corporate food providers such Aramark and Sodexo SA. Its customers are as varied as real estate manager Jones Lang LaSalle Inc., RingCentral Inc. and the San Francisco 49ers National Football League team.
“Food for work is very different from consumer food delivery and requires a range of solutions to meet the different needs of each business,” said Angela Du, investor for SoftBank Investment Advisers.
Mallett said she now expects EzCater to hold an initial public offering by 2023.
Besides SoftBank, Paris-based investor Quadrille Capital is participating in the round, which could aid EzCater’s expansion plans in Europe, Mallett said.
Growth investors including GIC, Iconiq Growth and Insight Partners contributed to the funding. Lightspeed Venture Partners is also a backer.