What happened: Office food delivery firm acquires U.S. competitor
Why it matters: Acquisition comes as future of offices remain uncertain
Foodee Media Inc. is hoping its first-ever acquisition will deliver.
The Vancouver-based food-delivery company, which specializes in bringing restaurant meals to offices, has gobbled up fellow corporate catering company Chewse Inc.
Chewse is based in San Francisco and operates in its home market as well as Austin and Chicago.
Foodee offers delivery services in Vancouver, Toronto and 12 regions across the U.S.
Terms of the deal were not disclosed, however, Foodee revealed July 13 the acquisition closed alongside new financing that brought in $13 million through a mix of equity paired with debt from an unnamed Canadian bank.
The equity raise was led by BDC Capital, a previous investor in the company.
Foodee closed a second tranche of a $10 million Series A funding round in September 2017.
That round was led by BDC Capital with participation from the taxpayer-backed B.C. Tech Fund, Vancouver’s Yaletown Ventures, San Francisco’s Structure Capital and Seattle’s Voyager Capital.
Prior to that Chewse had raised US$19 million in a fundraising round that closed in December 2018 for a total of US$30 million.
Foodee specifically targets corporate clients, as opposed to individual consumers, looking to do away with pizza parties and other fast foods for lunch in the office.
In Vancouver, Foodee has partnered with restaurants like Calabash, Burgoo, Biercraft and Tacofino — the last of which CEO Ryan Spong co-owns — to process orders made during non-peak hours.
The restaurants then prepare the food for delivery before the lunch-hour rush begins.
But the pandemic has introduced significant uncertainty about the future of corporate offices.
Shopify Inc. (TSX:SHOP) kicked off 2020 announcing plans to hire 1,000 workers spread across a four-storey, 70,000-square-foot office at Four Bentall Centre on Vancouver’s Dunsmuir Street.
As the COVID-19 crisis unfolded, CEO Tobi Lutke took to Twitter in late May to cast doubt on the future of such an office.
His company would be keeping its offices closed until 2021, “and after that, most will permanently work remotely. Office centricity is over,” he tweeted.
Spong acknowledged the changes being brought about by the pandemic in the company’s announcement of the Chewse deal, noting offices are moving away from platters of shared food to individually packaged meals.
The company said it will transition Chewse clients on family-style plans to individually packaged meals.
"As the economy re-opens across North America, the company's model is particularly well-suited in a social distancing environment by delivering individually packaged meals reducing elevator traffic and increasing employee safety,” Robert Simon, senior managing partner of the IT Venture Fund at BDC Capital, said in a statement.