Dive Brief:
- Slice, an ordering and marketing technology platform for small pizzerias raised $43 million in Series C funding Tuesday, according to a press release. Private equity firm KKR led the funding round along with participation from early investors, including GGV Capital.
- The company will use this capital infusion to enhance and scale its technology, which is currently used by over 12,000 pizzerias across the U.S and roughly 5 million customers.
- "The COVID-19 pandemic has also caused a significant surge in demand across our platform and we are focused on providing our pizzeria partners with the resources they need to access online sales channels at a time when in-restaurant demand has reduced significantly," Ilir Sela, founder and CEO of Slice, said in a statement.
Dive Insight:
Slice's cash infusion could help local pizza chains at a critical time as many states continue dining room closures. The digital platform also positions itself as an alternative to major third-party delivery platforms, which have come under fire in recent weeks for continuing to charge steep 20% to 30% commission fees amid the economic pressures of COVID-19. Critics have also pointed out that many of the delivery discount promotions by these companies, designed to help drive traffic to local restaurants, charge commission fees on pre-discount order totals and leave restaurants with little profit leftover.
Pizza companies overall have fared well during the novel coronavirus crisis thanks to their roots in delivery. April was Papa John's strongest month in the company's 35-year history, for example, with the brand reporting a 27% spike in comp sales for North America, CEO Rob Lynch said during an earnings call on May 6. Lynch attributed roughly 10% of that growth to the current COVID-19 environment, and said that Papa John's has captured more than 1 million new and lapsed customers during the month on just its digital channels.
Not every major pizza chain has seen a windfall from coronavirus, however. Domino's U.S. same-store sales growth fell by more than 50% during Q1 2020 and has temporarily closed 1,400 restaurants around the world.
Online ordering technology platforms like Slice could help independent pizza restaurants take back some of the market share they have been ceding to major players, and also help them compete with restaurant categories that, while not traditionally associated with delivery, have broken into off-premise thanks to third-party partnerships.
