Restaurant Venture Capital: Foodservice Tech Space Heating Up

Restaurant Venture Capital: Foodservice Tech Space Heating Up

by Aaron Allen
Restaurant Consultant, Speaker & Industry Analyst
Aaron Allen & Associates

Restaurant venture capital is starting to take on a new meaning. While it may refer to the early financing of a restaurant (or chain), more recent trends and activity have evolved to the term being primarily focused on foodservice technology investments. 

We are currently in the bronze age of restaurant technology, and the golden age is about to come. To participate in big valuation wins, investors have to get in early. In many cases, the revenue and EV acceleration will be like going from 0–60 mph in less than 2.4 seconds (many won’t believe this could happen and will therefore miss the opportunity).

Some key takeaways: 

  • Venture capital broke new records during the pandemic (across industries)
  • U.S. VC deal value grew almost five times in the last ten years to more than $150 billion
  • There are plenty of opportunities for VC investors in foodservice tech, and the upside can be realized quickly
  • A sample of foodservice tech companies indicates an average enterprise value growth of $455 million per funding round
  • The highest Enterprise Value to Revenue ratio we recorded was not for food delivery companies but for other types of foodservice tech (considering a sample of recent transactions)

While private equity capital is pouring into the usual choices and boosting valuation for restaurants and more traditional foodservice tech, there’s a lot of new market development within foodservice tech that benefits from VC funding.

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