New ezCater CFO says IPO is ‘in the cards’

When ezCater raised $100 million last year, CEO Stefania Mallett said that a public listing of her corporate food delivery unicorn was back on the agenda for 2023. Three months later, the Boston company hired the executive who carries on his shoulders the key responsibilities of the IPO process: a new CFO.

Nihad Rahman, 39, started as ezCater’s new top financial executive on Feb. 28, leading a team of about 15 people. He has never personally taken a company public nor held the CFO title before, but he advised many companies doing so as a former managing director at JP Morgan Chase & Co. (NYSE: JPM), one of the country’s lead IPO underwriters.

“If market conditions improve, it’s certainly in the cards,” he said about ezCater going public. “Let’s do that prep work in 2022. Let’s hope the markets are in a different place in 2023.”

EzCater hasn’t had a CFO since late 2019. The last person to hold that role, Bob Cruickshank, was chief administrative officer when he left the company in 2020.

Rahman, who plans to remain based in the New York City area and travel to Boston, said that a lot of his focus will be on creating a durable public company. For him, ezCater is a good fit for the public markets because it identified a problem early on — providing food at work — and is solving that problem at scale, nationwide.

“Typically, when those two things come together, the public markets get very intrigued,” he said.

Covid played a part in ezCater’s recent history, for better and for worse. At first, the pandemic had a disastrous impact on corporate food orders. As lunch meetings transitioned online, ezCater saw its revenue dropping by as much as 85% and laid off more than 400 employees.

But Covid also prompted countermoves, which added up to what Rahman calls a “story of resiliency.” Early on, ezCater realized it had to acquire more customers in sectors that weren’t well-suited to work from home, such as logistics, hospitals, warehouses and biotech companies working on site. At the same time, it designed a way to offer a menu of individually packaged meals to be delivered as a single order, minimizing contacts among co-workers.

Rahman noted that many companies use food to attract employees back to the office, so the margins ezCater is delivering and its growth trajectory are likely to look attractive to investors. “It’s not a $30 order. It’s a $300 order,” he said, talking about the economics of food at work.

Rahman added that ezCater hopes to pursue an IPO and not a SPAC deal next year. A deal with a special purpose acquisition company is “just not the right vehicle,” Rahman said, as ezCater right now doesn’t need cash and doesn’t feel the need to accelerate the timeline of its public market debut. Besides, with the stock market down so far this year, tech and biotech companies aren’t exactly rushing to ring the bell.

Whether the company plans to choose Nasdaq or the New York Stock Exchange, as well as what ezCater’s ticker symbol would be, remain to be decided.

“Something that excites me about the role is not only have we rebounded to run rate levels, pre-Covid, but the shape of the growth curve is steeper, and we’re that much more capital efficient,” he said. “So, you put all of that in place, and you have this incredible story for the public markets.”


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