There have been a handful of main offers this 12 months, and specialists say there are extra to return. | Picture by Nico Heins/Midjourney; logos courtesy of the businesses
It’s a great time to purchase a restaurant tech firm.
The primary half of 2025 has already witnessed a number of main acquisitions. DoorDash purchased SevenRooms for $1.2 billion, Marvel closed on supply service Grubhub for $650 million, and back-of-house giants CrunchTime and QSR Automations introduced a merger. After which on Thursday, Olo introduced plans to be acquired by funding agency Thoma Bravo for $2 billion. And the deal-making might be simply getting began.
The crowded restaurant tech market has lengthy been due for extra consolidation. Now a bunch of motivated consumers is colliding with a big pool of sellers whose costs are coming down, creating the proper situations for M&A.
The seeds for this shopping for spree have been planted about 5 years in the past, across the daybreak of restaurant tech’s golden age. The pandemic compelled extra eating places to begin utilizing expertise. Traders, emboldened by low rates of interest, made lots of large bets on restaurant tech firms. A whole bunch of recent startups have been born into the frenzy. A QR code provider raised a $24 million seed spherical.
However by 2022, the geyser of financing had begun to taper off. Cash was not low-cost, and traders have been shedding their urge for food for restaurant tech amid broader financial uncertainty. In 2021, almost $12 billion in enterprise capital funding flowed into restaurant tech globally, in line with PitchBook. By final 12 months, that was down to only $1.3 billion. Olo’s inventory was down 75% from its 2021 IPO when studies emerged of a possible sale. Many firms are equally seeking to make their subsequent transfer.
“Restaurant tech just isn’t the best finish market to spend money on,” mentioned Savneet Singh, CEO of POS provider PAR, which has acquired about half a dozen firms lately. Regardless of the general measurement of the restaurant market, most tech suppliers give attention to only a piece of it, he mentioned, which limits their development.
“Plenty of firms raised enterprise rounds that 5, six, seven years later are nonetheless single-digit hundreds of thousands of income,” Singh mentioned. “And there’s this large drawback of, nicely, no enterprise funds are going to return in at any valuation that you simply’re gonna be comfy with. … So, persons are making an attempt to promote.”
He mentioned the variety of M&A offers out there proper now could be the best he’s seen since he joined PAR in 2018. The corporate at present has a listing of 12 to twenty potential targets. “If they’ve a possibility, we are going to pounce,” Singh mentioned.
Antsy founders usually are not the one ones seeking to promote. Traders that got here in earlier than and through the pandemic are additionally nearing their typical five-year funding horizons and heading for the exits.
From 2015 to 2019 alone, about $62 billion was invested in restaurant expertise, mentioned Jason Myler, a managing director with funding financial institution BGL. Then the pandemic hit, pushing funding timelines again a 12 months or two, whilst extra capital was pouring in. Which means an entire lot of firms might be coming to market over the subsequent couple of years.
“The shot clock is on from an funding standpoint,” Myler mentioned. “Whether or not firms are doing nicely and they will be chasing actually good multiples or they don’t seem to be doing as nicely, you will need to discover a dwelling.”
The query is, will there be sufficient properties to go round? Within the restaurant tech world, there are solely so many firms large enough to swallow smaller ones. However there’s actually an urge for food for M&A amongst these firms, as a result of including extra options is among the surest paths to development as of late.
“You have to have lots of worth you are providing the shoppers to get their consideration and to drive your skill to get capital,” mentioned Bo Davis, CEO of back-office software program provider MarginEdge. “It forces us and everybody else in restaurant tech to be sure that we’re doing increasingly more and extra for the eating places.”
MarginEdge has achieved that partially by spending extra on R&D. However it additionally made its first acquisition final 12 months, shopping for the beverage stock firm Freepour so it may supply eating places a brand new device.
DoorDash’s acquisition of reservations and advertising and marketing supplier SevenRooms adopted an identical logic. The $1.2 billion deal will transfer the corporate past supply and on-line ordering and into eating places’ on-premise enterprise in an enormous approach.
“What you are beginning to see is consolidation round a one-stop store,” Myler mentioned.
Eating places watching from the sidelines could have blended emotions about all this. When a handful of suppliers begin to occupy extra of the tech stack, that’s at all times trigger for some concern.
Giordano’s, as an example, prefers to work with tech firms which might be keen to combine with others, giving the pizza chain the pliability to decide on distributors by itself phrases. It worries that the rise of the one-stop-shop may restrict its choices.
“I encourage competitors between the companions, as a result of then everyone wins,” mentioned CEO Nick Scarpino. “When you simply construct silos after which limit individuals from going out [and choosing their partners] … I believe that is only a walled backyard, and also you get in there and also you say, nicely, now you are caught. And I do not need that.”
He famous that one among Giordano’s tech distributors was not too long ago acquired, and the corporate is having this precise dialog with them.
However many tech suppliers say they abide by an open strategy. PAR affords someplace within the neighborhood of 650 and 700 integrations, Singh mentioned. MarginEdge will combine with firms even when they provide competing merchandise, if it’s going to make shoppers completely happy.
“Whereas I’ll supply a function set that I believe is superb … if [the restaurant] needs to make use of anyone else’s, god bless them,” Davis mentioned. “It is my job to make them wish to use mine, to not construct a walled backyard that nobody else can get to.”
There might be some advantages to consolidation, too. The restaurant tech market is cluttered with suppliers, and regardless of the latest M&A, it appears to be increasing moderately than shrinking. On the Nationwide Restaurant Affiliation Present this 12 months, there have been so many tech distributors that the occasion needed to broaden its showroom to suit all of them. The sheer variety of choices may be overwhelming.
“I really assume on the finish of the day, consolidation will make it a lot simpler and extra seamless for eating places to run their very own enterprise moderately than making an attempt to handle all these disparate methods,” mentioned Myler.
Singh argued that poor integration between apps continues to be holding eating places again. He used the instance of how our emails and digital calendars are seamlessly linked.
“Now think about these are two separate purposes, and also you’re typing my identify in your calendar, and also you’re like, ‘Oh, crap. His electronic mail’s really saved in that database. I gotta go over there and duplicate it over.’” he mentioned. “That is restaurant expertise at the moment.”
In the end, whether or not M&A might be good or unhealthy for eating places is probably going a moot level. Everybody appeared to agree that some consolidation is inevitable.
“These are traits that each vertical goes via over time,” Davis mentioned. “It’s simply that the restaurant area occurs to be a bit behind.”
True blockbuster offers may nonetheless be uncommon. These transactions carry extra danger, and there are solely a handful of restaurant tech firms large enough to drag them off.
“I do assume we’ll see extra, however I do not assume you’ll ever see it quick and livid,” Davis mentioned. “That’s very a lot medium- to later stage within the evolution of the market.”
Nonetheless, the situations are there for some main dominoes to fall quickly.
“It’s only a query of capital and a number of,” Myler mentioned. “Sellers are gonna have to return down of their valuation expectations, as a result of it’s not 2021 anymore. However there’s completely a thesis that claims that some massive strategic offers get achieved going ahead.”
