Weeks after becoming a public company, Louisiana-based food delivery startup Waitr is doubling its footprint with the $321 million acquisition of Bite Squad in Minneapolis in a deal that will put Waitr in more than 500 cities in 22 states.
As of Sept. 30, Waitr was in 235 cities with over 7,700 restaurant partners in nine states across the Southeast, while Bite Squad is in more than 300 cities with more than 11,000 restaurants throughout 18 states. The two companies overlap in just five states.
The deal was announced Wednesday by Waitr Holdings Inc., its third and largest acquisition since being founded in Lake Charles in 2013, and the first since it began trading on the Nasdaq stock exchange last month.
“It immediately doubles our scale from a footprint perspective and from a revenue and gross food sales perspective,” Waitr Chief Executive Officer Chris Meaux said.
Waitr has grown rapidly from a small Lake Charles-based startup to grab a slice of the fast-growing food delivery services market. The company this year was acquired for $308 million by Texas billionaire Tilman Fertitta’s Landcadia Holdings to make it a publicly traded company.
Waitr has an operations center in Lafayette, along with offices in Lake Charles, Baton Rouge and elsewhere. The company is projected to be a major employer in the Lafayette region, joining Stuller Inc., Acadian Ambulance, Schumacher Group, LHC Group and CGI as part Lafayette’s “big six” employers, according to economist Loren Scott’s annual statewide economic forecast presented in September.
Since launching, Waitr has found success employing what Meaux calls the “Walmart strategy,” rolling out in small to medium-sized markets to boost name recognition. Meaux said the company could eventually be pulled into larger markets throughout the country.
The food delivery services market has seen several companies, like UberEATS and Grubhub, quickly rolling out in new markets, much like ride-hailing services have done in recent years. But Meaux has said Waitr is leading UberEATS and other competitors in most of its markets, even in cities like Baton Rouge, where Waitr has experienced problems running smoothly.
While the company is profitable on a “market-by-market” basis, the company itself is not yet turning a profit, Meaux said. Instead, it is in “growth mode” as it expands across the country and gains name recognition, he said, and eventually, after scaling up, will become profitable.
In the third quarter of this year, Waitr posted $77.7 million in gross food sales, more than double what it did in the same period a year earlier. It was projected to bring in $65 million to $68 million in revenue for 2018.
The acquisition of Bite Squad, which was founded in 2012, a year before Waitr, is a natural expansion of Waitr’s business model, Meaux said Wednesday.
Both companies hire drivers as employees, unlike many other online services platforms that hire drivers as contractors. Also, both companies serve small and medium-sized markets, and are the leading player in most of the markets where they operate. Bite Squad is operating in markets that are “complementary” to Waitr’s, Meaux said.
“What we liked about the company is they remind us a lot about ourselves,” Meaux said. “Our strategies are very much the same.”
There won’t be any immediate impact on the operation of either company, he said, though Waitr will look for ways to integrate Bite Squad in the coming months. The deal is expected to be completed by the end of January.
Waitr operates in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, South Carolina, Tennessee and Texas. Bite Squad is in Arkansas, Florida, Hawaii, Iowa, Maryland, Minnesota, Nevada, North and South Carolina, North and South Dakota, Ohio, Oklahoma, Tennessee, Texas, Virginia, Washington and Wisconsin.
The price of the transaction includes $202 million in cash and 10.6 million shares of Waitr’s common stock, and is subject to adjustments based on the closing price of Waitr stock on Dec. 11.
Waitr stock, trading under the ticker symbol WTRH, ended the day up 2.1 percent, or 24 cents, to $11.50 a share. It had a market capitalization of nearly $628 million.
Acadiana business today: Waitr acquires Minneapolis-based food delivery service; Local pie-maker Acadian Slice to expand to food truck, delivery services
Weeks after becoming a public company, Louisiana-based food delivery startup Waitr is doubling its footprint with the $321 million acquisition…
Can't see video below? Click here.
Louisiana State Police will be handling the abuse allegations at T.M. Landry Preparatory School, taking over from the Breaux Bridge Police Dep…
Louisiana’s top health official said 2019 will be the “year of public health,” with the state agency shifting its focus to “social determinant…
As a rule, when you say Louisiana, most people outside of the Pelican State respond with New Orleans. Or, more specifically, the French Quarter.
Lafayette-based Good Eats Kitchen, which recently brought its prepared meal business to the Baton Rouge market, has acquired the two Fresh Kit…