Restaurant365, the Irvine-based restaurant management software company founded in 2011, has just hit a number of notable milestones: it has passed $100 million in annual revenue and joined the ranks of Orange County recent unicorns—private firms with a valuation of $1 billion or above—thanks to its largest-ever funding deal.
The firm, whose cloud-based, “all-in-one” enterprise software is designed to help restaurant operators increase sales, control food costs, and optimize labor, said May 19 it had a received a $135 million funding round co-led by private equity giants KKR and L Catterton.
The deal pushes CEO Tony Smith’s company into a rare atmosphere among tech-focused firms in OC (see story, this page).
“Having recently crossed exciting milestones of $100 million in revenue and $1 billion in value, we can’t wait for what’s next,” said Smith, who is also the company’s co-founder, following the funding announcement.
The deal’s backers each count several ties to OC: NY-based KKR in recent years has invested in local firms including eye-focused device maker AcuFocus and investment firm PAAMCO, while Connecticut’s L Catterton’s investments have included Irvine’s Just Food for Dogs and Xponential Fitness Inc. (NYSE: XPOF).
The latest funding round also involved participation from current investors in Restaurant365, including Iconiq Growth and Bessemer Venture Partners, the company said.
Technology news and information website TechCrunch reported on May 19 that Restaurant365 has now raised $288 million in funding since its inception; the company did not comment on that estimate.
Restaurant365 was last valued just over $305 million in 2019, TechCrunch said, citing data from PitchBook.
Proceeds from the latest round will be used for product enhancements, while also expanding its market share.
“As a private company, we don’t disclose profit margins, but we have strived to keep the business in a solid financial position,” Restaurant365 told the Business Journal.
The Restaurant365 platform “simplifies day-to-day management for restaurant operators by combining accounting, inventory, scheduling, payroll, and HR solutions into one cloud-based system,” Smith told Business Journal on May 22.
“Our software is used by over 40,000 restaurants,” he said.
The company’s software provides a whole array of functions that let restaurants operate more efficiently.
That cloud-based technology includes accounting, data analytics, payroll, staff and inventory management and scheduling, letting restaurants control food costs, make the best use of staff members and stay profitable.
The software can also facilitate bank reconciliation and provide advanced forecasting, for example.
“The result is accurate, timely reporting that provides a clear and complete view of their businesses,” according to the company.
The firm says its customers include Dave’s Hot Chicken of Pasadena, as well as California Fish Grill and Taco Bell, both in Irvine.
Restaurant365’s “Essential” package costs $435 per month per location, while “Professional” costs $635 per month per location, according to the company’s website.
Restaurant365’s headcount has grown to around 700 from about 600 last year.
The company was advertising for more than 30 positions on its website as of May 22.
Along with its Irvine Spectrum-area headquarters, Restaurant365 has an office in Austin, Texas. Two years ago, it bought a rival company, Compeat, based in that city.
Restaurant365 says it’s constantly on the lookout for innovative ways to help restaurant operators.
For example, the company recently launched a restaurant-specific business intelligence tool, R365 Intelligence, which enables restaurant operators to combine metrics from various platforms with R365 data for complete business intelligence reporting in a centralized location and plan to continue expanding on its features.
The firm said last September it had launched a suite of payroll-focused digital tools, R365 Workforce, that includes the ability to pay staffers daily.
R365 Workforce will also soon have Tip Automation which is an easy way for operators to create an unlimited number of tip automation rules based on job codes, percentages, and time worked.
Smith, a 2021 Business Journal Innovator of the Year Award winner, was the keynote speaker for the 2022 edition of the award event. He is one of three co-founders of Restaurant365, alongside Morgan Harris and John Moody.
Unicorn Sightings in OC
Many startups dream of reaching “unicorn” status, when a private company is worth $1 billion, based on their latest funding rounds.
Here are some recent examples in Orange County’s tech sector:
- Palmer Luckey’s high-tech defense contractor Anduril Industries Inc. in Costa Mesa may be the best known recently named unicorn.
The company said last December it had received a nearly $1.5 billion financial boost, almost doubling the company’s valuation to about $8.5 billion.
- Last July, investors valued healthcare software company Tebra Technologies Inc., in Corona del Mar, at more than $1 billion after a $72 million funding round.
Tebra’s services include a variety of digital tools for independent healthcare practices, including website management, online appointment scheduling, patient portal oversight, data analysis and billing services.
- Kajabi LLC, an online software platform for small businesses and entrepreneurs, said in 2021 it had raised $550 million in a new financing round that pushed the company’s valuation past $2 billion.
The Irvine-based company, founded in 2010, helps its members build and manage websites and digital offerings such as online courses, membership communities, podcasts and more.