Waitr’s meteoric rise as a tech startup was eventually pulled down by an ill-advised acquisition, a dwindling amount of cash and years of declining revenue, an Acadiana Advocate analysis revealed.
The delivery company, which was acquired by Texas millionaire Tilman Fertitta’s Landcadia Holdings in 2018 for $308 million and later rebranded as ASAP in 2022, struggled following its initial acquisition of Minnesota-based Bite Squad in 2019 before founder and CEO Chris Meaux and the company parted ways.
What followed were rounds of layoffs, a stock that was booted off the Nasdaq for poor performance and a decision last June to end its own delivery service and contract with Uber Technologies instead.
Finally, on Monday, the company that five years ago was a bright star among startups in Louisiana filed for Chapter 7 bankruptcy. In its documents filed earlier this week in federal bankruptcy court, parent company Waitr Holdings cited up to $100 million in debt and 999 creditors along with no more than $50 million in assets.
Waitr Holdings’ stock price, at $14 a share in March 2019, was at 42 cents just before it was delisted last spring.
Meaux said the news of the company’s demise brought on feelings of “disappointment and sadness.” He wondered if the outcome could have been different had he still been with the company that sprung from an idea he sketched out on a napkin in a Lake Charles coffee shop.
“It was a bitter day, actually,” Meaux said of the day the Waitr Holdings announced its closure. “I guess, in my mind, had I still been there, would the end result have been the same or would it have been better? Pretty tragic and didn’t have to be that way, at least in my opinion.”
The ending may have been inevitable to some as its Lafayette presence shrunk and the company’s leaders who played significant roles early on left for other jobs.
Yet many in the startup lane still pointed to what would be Waitr’s footprint in the region. Many involved in the early days are the main drivers behind other local tech startups, including hampr, FlyGuys, Something Borrowed Blooms and Keepers, said Mandi Mitchell, president and CEO of the Lafayette Economic Development Authority.
Seeing the company come to an end is sad to witness, she said, but it demonstrated the area’s potential for tech startups.
“On average, a typical exit like they had typically takes 9 ½ to 10 years. They did it in five,” said Destin Ortego, director of the Opportunity Machine, which housed Waitr in the early years. “From a startup perspective, that drew a lot of attention to Lafayette and to Louisiana as a whole. Chris Meaux showed you could raise that type of capital for that type of startup in Louisiana.”
Now it leaves those early players and others who fell in love with the company wondering what might have been. How did a company whose leaders traveled to New York to ring the bell to mark the opening of the Nasdaq stock market in 2018 and lured Saints quarterback Drew Brees in as an investor cease to exist less than five years later?
“The Waitr I knew and loved died three or four years ago, and I’m OK with that” said Whitney Savoie, who left Waitr in 2020 and is now with FlyGuys. “In a perfect world, Waitr would have become public and continued to grow and become a sustainable company that lasted forever and ever and ever. Unfortunately, that didn’t happen.”
Her name was Donna
The story of how Waitr hatched has been told many times, but it’s still good storytelling.
Meaux recalled returning from a startup convention with an idea and emailing computer science professors at LSU, University of Louisiana at Lafayette and McNeese State about it.
He got one bite: an instructor at McNeese, who connected him with students Adam Murnane and Manuel Rivero. They met at a coffee shop in Lake Charles for the first meeting and wrote their ideas on a napkin.
Meaux, who is in the early stages of writing a book about his startup experiences, recalled how the barista there, Donna, stopped them before they left.
“She said, ‘Hey, can I have that napkin and you guys sign it? I was overhearing what y’all were talking about and I think that’s going to be big,’” he said. “So we all signed the napkin and gave it to her. I thought, well, you know, we may never make this into anything.”
What sprang from that meeting was an idea — ordering food on your device and have it delivered to you — that launched in Lake Charles and then in Lafayette in 2015 with over 100 employees. Two years later Waitr was handling 2,000 orders a day in Lafayette alone.
Bryan Horton, who was part of that launch in Lafayette as manager of the customer service team, noted how the staff became obsessed with the company’s growth. Orders went from 200 orders a night to 10,000, and Meaux was often on the front lines .
“We all kind of bought in,” Horton said. “We were so close — problem-solving on the spot, not higher-ups making decisions. We were finding solutions together and implementing them. It was all very exciting because we were all a part of it.”
And it was a fun place to work. Matthew Lundmark joined in 2016 and recalled the office had nap pods and video games. Employees could play ping pong; higher-ups would ride bikes through the office.
Employees had unlimited paid time off, Meaux said, as long as it didn’t affect their job and they had someone to cover.
“It was fun and it was focused,” Lundmark said. “It was like we were all in it together working toward a bigger, broader goal. ”
Waitr was growing fast and surfacing in mid-sized markets across the Southeast. The company posted three straight years of triple-digit growth, said Joe Stough, a board member at the start who was later company president.
Meaux made shrewd moves as the company grew, including hiring Dave Pringle as chief financial officer and Sonny Mayugba as chief marketing officer. Both were in Silicon Valley jobs when they joined Waitr.
“It was possibly the most important, positive turning point that enabled Waitr to explode the way it did,” said Stough, now CEO at FlyGuys. “Those two guys were rock stars. We made a great team with Chris, and Chris made that decision. Chris was really talented at making quick, instinctive decisions.”
By the time of the merger, Waitr was in 230 cities and partnered with 6,200 restaurant, employed about 8,000 drivers and about 400 in its corporate offices in Lafayette, Lake Charles and other markets.
It was big news when Meaux was named finalist for Gulf Coast Entrepreneur of the Year in 2019. It was even bigger news when he won.
‘We attached an anchor to the company’
When Waitr went public Nov. 16, 2018 after its merger, shares went for $11.81 at the close of market that day. The next day the company had more than $200 million in cash in the bank with a burn rate of $1 million a month, Stough said.
Two months later it announced a $323 million acquisition of Minneapolis-based rival Bite Squad. It doubled the company’s footprint, putting it in over 500 cities in 22 states.
But it was also the costliest move, Stough recalled, and what turned out to be the turning point for Waitr. Its board before the merger was not warm to the idea of acquiring Bite Squad, but the board after the merger green-lighted it as a quick way to grow and battle bigger companies like DoorDash and GrubHub, which were entering mid-sized markets with much more money.
Bite Squad, it turned out, was spending $3 million a month and declining in market share in most of their major markets.
“Basically we just attached an anchor to the company,” said Stough, not a board member at the time. “The new board was obviously not thrilled with the Bite Squad merger, but you just had to live with it. All the cash was gone. Had we just held pat, only positive things could have happened. Or at least neutral.”
By June the company began shedding employees. Its share price, at $13.86 that March, cratered to 25 cents in November.
The cultures between the two companies, Meaux recalled, did not mesh.
“We were a work-hard, play-hard kind of company,” he said. “At Bite Squad, the culture was, you always have to be at work and you can’t take more than two days off at any given time. Even the personalities of the people that were working for both of the companies were different. It started to breed discontent on both sides.”
Then came a bigger bombshell: On Aug. 8 Meaux and Waitr separated with Meaux staying only as board chair. The company’s market value dropped to $134 million after being as high as $910 million just five months earlier.
Meaux said he and the board came to “an amicable agreement for my exit.”
The company ended the year $291 million in the red and announced massive layoffs in March 2020. The coronavirus pandemic gave the company a small boost, but by the first quarter of 2022 it reported a loss of $77 million.
Customer service quality, too, began to suffer. Crystal Deville of Rayne said she began using Waitr five times a week about three years ago before it became unreliable and more costly.
Getting food sent from Rayne to Crowley was a $7 charge for Waitr but only $3 for DoorDash, she said. Sometimes her orders with Waitr were never assigned to a driver.
“So up to two hours waiting on the food, you get it, it was all cold,” Deville said. “Or they wouldn’t get it at all and you would have to go and get it yourself. I would just cancel the order and go and pick it up myself, and then they would refund you. It would take days sometimes to get the refund.”
Mary Pepper said she had similar experiences while working at a CC’s Coffee, including Waitr orders that were beyond the cafe’s inventory. Workers would then try to reach Waitr, but calls often went unanswered.
Ben Herrera, a Lake Charles restauranteur who was also an investor and employee with Waitr, said things changed after the Bite Squad deal. In the early days, Waitr took a cut of about 4% per to-go order from restaurants, but that rate increased several times until Waitr was taking up to 25% per order.
Some restaurants even participated in blackouts on the Waitr platform in 2019.
“I think Waitr created a lot of bitterness and animosities with its employees who helped grow the company,” Herrera said. “Others maybe don’t have those sentiments, but a lot of people were collateral damage of big business, of downsizing, of trying to get operation costs down to go for profitability.”
Now back in California and having worked with other tech companies, Mayugba says Waitr’s demise did not have to be this way. It could remain today as a stronger player in the market or as part of DoorDash or GrubHub as the food delivery concept is more common.
“From Texas to North Carolina, we really owned that territory,” he recalled. “I believe there would have been options to either join one of those big players or continue to be a regional player and fight with them. It’s all based on a bunch of different decisions, and I’m not sure what led to it, but it’s just too bad.”