Waitr Holdings Inc. acquires Minneapolis-based Bite Squad for $321.3 million
Waitr acquired online restaurant food delivery platform Bite Squad for $321.3 million on January 18. “We are thrilled to join forces with the Waitr team,” said Kian Salehi, co-founder and Chief Executive Officer of Bite Squad in a press release. “I believe Chris and his team share our vision for providing hungry diners with…
Waitr acquired online restaurant food delivery platform Bite Squad for $321.3 million on January 18.
“We are thrilled to join forces with the Waitr team,” said Kian Salehi, co-founder and Chief Executive Officer of Bite Squad in a press release. “I believe Chris and his team share our vision for providing hungry diners with a convenient and fast way to enjoy great food from the best local restaurants and chains.”
Diners can use Waitr’s mobile food ordering platform to request delivery and pay for purchases.
“We have followed Bite Squad’s growth and success for many years and believe their mission, business model and growth profile share many similarities to Waitr,” said Chris Meaux, founder and Chief Executive Officer of Waitr, in a press release. “We believe that a small fraction of the U.S. restaurant industry’s sales is from off-premise online transactions and this is evolving rapidly. This acquisition will help us drive additional growth and provide a step function increase in scale throughout the U.S. in order to better serve that developing market.”
SPN caught up Kyle Hale, Bite Squad COO, who shared with us the Bite Squad story, and how the acquisition unfolded. The following are his responses.
Bite Squad was built upon a goal to improve the food delivery experience for customers and restaurants alike. As foodies and entrepreneurs, Arash Allaei and Kian Salehi saw a need for a restaurant food delivery service in their hometown of Minneapolis. They knew they could build a better business model, with better technology, to overcome typical food delivery challenges, such as on-time arrival and keeping food hot.
Leading up to Bite Squad, Arash and Kian established a holding company, Kasa Capital, in 2008, for e-commerce endeavors. Their first venture was the acquisition of a company that offered an e-commerce catalog of car parts and accessories, followed by the acquisition of several other e-commerce sites selling consumer-focused products. In 2010, they launched CrowdCut.com, a daily deal site similar to Groupon, which met with great success. Using the strong restaurant relationships and established customer base they created through that endeavor, plus technology their developers spent six months building, Arash and Kian launched Bite Squad in the summer of 2012. (CrowdCut was sold in 2014.)
Bite Squad made its debut in Minneapolis with five drivers and 17 restaurants. In 2014, they took their business model to Seattle, and then to Las Vegas. In six short years, the company significantly expanded its reach through the acquisition of smaller restaurant delivery services (approximately 40 in total) and organic expansion. Currently, Bite Squad is operating in 65+ major metropolitan markets (over 380 cities), throughout 22 states.
SPN: Tell us about the Bite Squad founders and team.
KH: Kian and Arash became friends at the University of Minnesota, where Arash majored in computer science and Kian majored in economics and management. After graduation, Kian began his career at Minnesota-based Hemisphere Companies, working on real estate development and finance for hospitality and gaming projects. Arash began independently developing e-commerce start-ups. They reconnected in 2007 and soon became business partners.
SPN: What were some of the most memorable moments of Bite Squad’s start and growth?
KH: What’s funny about a company that grew as fast as Bite Squad is that it wasn’t until very recently (within the last two years) that we had much separation of roles and responsibilities. When the company launched, we were growing much faster than we could hire, so Kian always had a uniform with him at all times because he never knew when he would have to go out and deliver orders. When he finally graduated from delivering orders, he still maintained a close watch over dispatching and customer service–and he still does today. Arash is still incredibly hands-on with our technology and has been able to maintain a relatively small tech team for a company our size in part because of how much he’s done himself.
SPN: What were some of the company’s proudest moments as a startup?
KH: We celebrate milestones…our first million orders, then our second and third, which seemed to come so much faster than the first. It makes us incredibly proud when we see our Squadron (that’s what we affectionately call our driver team) making local news for doing great deeds in the community or providing great service that people talk about. Our mission is to make our customers’ day, and our customer service team sends around “day makers” each week, sharing the stories of customers who had a great experience with our team.
SPN: How did the exit decision and conversations unfold at Bite Squad? How did the decision arise, and how was the decision made? Were there concerns or challenges to overcome, and how was that accomplished?
KH: The decision was about continuing to strengthen our position as a leader and innovator in the space–not by growing fastest, but by growing smartest. Waitr and Bite Squad have similar points of view about building the business the right way, and we have very little overlap in geography, so each of us adds almost total incrementality to the other.
SPN: What have been some of the unexpected or interesting changes for the team/founders/company since the acquisition?
KH: The challenges ahead are largely the same ones we had before. Our biggest challenge is to continue to grow our footprint into uncharted markets while maintaining a high level of service for our customers, and bringing real value to our drivers and restaurant partners. Now, we have a new set of partners who are solving the same problems we are. It’s as though we’ve just inherited the world’s best consultants–not generic ones who have some standard plays in marketing, or operational excellence, but consultants who eat, sleep and breathe restaurant delivery, just like we do.
SPN: What do you believe are the challenges and innovations for the future in your industry?
KH: We’re still in a high-growth category and will be for 5+ years at least. Technology is going to continue to improve our ability to provide a great service with efficiency and scale. But we’re also going to have to learn to keep growing after there are no more “green” fields to plow. Similar to others in fast-casual, or other retail spaces, we’ll have to keep finding new ways to serve our consumer, restaurant and driver networks with value exchanges that benefit all three groups.
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