Goldbelly Raises $ 100 Million During Pandemic Boom
When the pandemic started last spring, Di Fara, one of New York’s legendary pizza restaurants, had the same question as countless restaurants across the country: how would he make money when customers weren’t allowed to go through its doors?
An answer quickly emerged: Shipping frozen (and slightly smaller) versions of its classic pies across the country in partnership with the eight-year-old Goldbelly e-commerce platform.
Sales increased so much that Di Fara converted his second two-year-old food hall site to a Goldbelly production line. Margaret Mieles, the daughter of the founder of Di Fara, who had already struck a deal with Goldbelly in December 2019, credits the platform with helping the pizzeria avoid layoffs.
It wasn’t just iconic pizza restaurants that relied on Goldbelly to survive lockdown orders. More than 400 of the 850 restaurants that sell food on the Goldbelly platform have joined since the start of the pandemic, an influx that the company says has more than quadrupled sales in the past 12 months.
On the back of this windfall, Goldbelly plans to announce this week that it has raised $ 100 million in new funds.
The question now is whether the trends that Goldbelly and its new investors plan to capitalize on will survive the pandemic, or whether an outbreak of in-home dining will subside as more and more people feel again at home. comfortable eating at a restaurant.
Goldbelly, which was founded in San Francisco in 2013, started off offering dishes like deep pizzas from Lou Malnati’s in Chicago and Texan-style breasts from Salt Lick in Austin. Much of what it offers restaurants is logistics: providing cold boxes and packs for shipping orders, and helping restaurants ship directly from their premises. In return, Goldbelly charges fees, leading to high prices. Shipping two classic Neapolitan pizzas from Di Fara, for example, costs $ 89.
“We are the premier platform for food e-commerce, national e-commerce for restaurants and food manufacturers,” said Joe Ariel, co-founder and CEO of Goldbelly, in an interview. “We’re basically opening up a 3,000 mile radius for restaurants.”
While some prominent chefs signed up early on, others were more reluctant. Justin Kennedy, the chef at Parkway Bakery & Tavern in New Orleans, recalls dodging calls from Goldbelly reps launching the platform for over a year, before relinquishing in September 2019. Even then, he said in an interview, he would ship maybe 15 boxes in any given week.
Then pandemic lockdowns devastated the restaurant industry. More than 110,000 restaurants nationwide had closed permanently by December, the National Restaurant Association estimated, and a survey it conducted found that sales in October fell from a year earlier for 87% of survivors. full service.
Mr. Kennedy closed Parkway in March 2020. When he restarted the business several months later, he began shipping his signature po ‘boy sandwiches through Goldbelly. At the height of the pandemic, Parkway was shipping around 200 orders per week, doing pretty much the same activities it did in the pre-pandemic – it was only now that its customers included people far from New Orleans .
Today in business
“We have had customers from Alaska calling us asking what to do with the leftovers,” Kennedy said. “These are customers we never would have had.”
Some restaurants seeking other sources of income during the pandemic have turned to local delivery services; Total orders on the DoorDash platform in 2020, for example, approximately tripled from the previous year.
But like Mr. Kennedy, many have also turned to Goldbelly to ship their pork shoulder dinners, bagel brunches and lingonberry cheesecakes to places as far away as Hawaii. (Goldbelly doesn’t consider services like DoorDash to be competitors, as their food typically takes at least a day to arrive and requires cooking).
Mr Ariel recalled that at the start of the pandemic, what was then a staff of 40 people took 18 hours a day to cope with increased demand. Average order size has grown by around 20% over the past year and Goldbelly’s workforce has grown to more than 130 people, including a new COO and CFO.
In the meantime, Goldbelly has changed the way some restaurateurs think about their business. Danny Meyer, the restaurateur behind Shake Shack and Union Square Cafe and an existing investor in the company, said in an interview that his Gramercy Tavern added items like a grilled eggplant parma – something that before would never have been served at the Michelin starred restaurant. restaurant – partly because it would do well on Goldbelly.
Spectrum Equity, the investment firm leading the new funding round, reached out to Goldbelly last year to see how the company was able to connect local restaurants to a national audience.
“The pandemic has really accelerated the trends that were already happening,” said Pete Jensen, CEO of Spectrum, adding that Goldbelly’s growth had been “extraordinary”.
Mr Ariel said the new capital – raised at an undisclosed valuation – would help Goldbelly grow further, including hiring more staff and increasing new offerings such as live cooking classes with celebrity chefs, including Marcus Samuelsson and Daniel Boulud. The company aims to have more than 1,000 restaurants on its platform by the end of the year.
The goal, Ariel said, is to make Goldbelly the largest platform on which restaurants make money outside of in-person meals, while growing their brands nationwide.
While Mr. Ariel’s speech appears to be the precursor to further public market listing, he doesn’t deny it. “In the future, we want to be a public enterprise,” he said. “We believe that we are only at the beginning of the food e-commerce revolution.”
The big question is whether the business has experienced a temporary rebound or opened a new level of permanent activity. Even Mr. Ariel admits that last year’s growth rate “won’t happen forever.” But there are promising signs that eating at home restaurant meals is not going out of fashion. DoorDash, for example, tripled its revenue in the last quarter even as coronavirus vaccinations became widespread.
Goldbelly’s success is also likely to attract other rivals. While Mr. Ariel played down the prospect of competition – his business name is used as a verb, he said – some bosses haven’t canceled it.
“We’ll cook where the customers are,” said Samuelsson, whose Streetbird restaurant is on the Goldbelly platform.
But others, like Ms. Mieles from Di Fara, said they remained committed to the service. “I think, honestly, Goldbelly is here to stay,” she said.