How ZeroCater Became A $100M Startup With $1.5M Of Investment | Food + Tech Connect

Catered lunch is now a commonplace work perk. Google’s utopian cafeterias set the stage companies in the Bay Area and beyond to provide their employees with delicious meals. As the fifth employee at Justin.tv (now Twitch), Arram Sabeti was tasked with ordering lunch. It was his most stressful and frustrating responsibility, so he decided to launch a company to make it easier for businesses to order food for their employees online.

Sabeti started ZeroCater in San Francisco in 2009 using nothing more than a spreadsheet to facilitate orders between offices and local restaurants. Cut to 5 years later and the Y Combinator-backed startup has built a platform that lets its clients create customized menus, facilitates delivery logistics and tracks performance metrics for its partners, which include restaurants, caterers and food trucks. ZeroCater makes money by taking a percentage of every transaction. The 100 person startup has expanded to Chicago, Washington D.C. and New York City and serves tens of thousands of meals a day to clients including Google, TED, Salesforce and The Daily Show.

In August, ZeroCater hit a major milestone. It announced that it had surpassed $100M in orders with only $1.5 of investment, something that sets the company apart from other office catering startups like Zesty, Eat Club and Chewse that have raised millions to expand. How did ZeroCater do it? The startup focused on demonstrating profitability and hiring the right people rather than bringing on lots of capital to scale quickly. “When we started, VCs had no interest in food tech, but now we’re in the middle of the first-ever food tech boom,” Sabeti tells me.

We chatted with Sabeti via email about ZeroCater’s fundraising strategy, lessons learned from Y Combinator, building successful relationships with restaurants and more. Our interview has been edited for clarity.

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FTC: How has your business model evolved since launching ZeroCater in 2009?

 

Arram Sabeti: We were lucky to find product-market fit immediately, so the concept itself has’t changed much. The way we deliver on that concept has changed tremendously. It started on a spreadsheet. Now we have software that helps us run things. It does ever

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