- ZeroCater, a startup based in San Francisco, takes care of the logistics of office catering for companies including Salesforce, BuzzFeed, and Fandango.
- Before he became ZeroCater's CEO and founder, Arram Sabeti sold his car and moved to San Francisco with the single goal of starting a company.
- A job as an office manager showed Sabeti that catering is the most stressful part of office operations, which sparked the idea for ZeroCater.
- The company just announced it's raised $12 million in a Series B round of funding and is eyeing a national expansion in 2018.
ZeroCater, a startup based in San Francisco, makes lunch magically appear at startups and corporate campuses from Los Angeles to New York. It takes care of the logistics of office catering by being the middleman between customers and its network of over 500 restaurants.
Before founder Arram Sabeti led ZeroCater to over $250 million sales in less than 10 years (with only $5.6 million in capital before the latest round), he was a student at a community college who was obsessed with the idea of becoming an entrepreneur.
At age 21, Sabeti sold his car, hitched a ride from Orange County to the San Francisco Bay Area, and got a job scooping ice cream at Ben & Jerry's with the single goal of starting a company.
Melia Robinson/Business Insider
He was soon hired as the fifth employee at Justin.tv, the life-streaming service that later grew into Twitch. At Justin.tv, he oversaw office operations and ordered lunch for the team. But getting food delivered for "the most picky" eaters turned out to be the most stressful part of the gig, Sabeti said.
Some days, the delivery came late. The order was wrong. Or the food just wasn't that good. Sabeti maintained a list of restaurants with order dates in an Excel spreadsheet.
When his boss mentioned to him that a friend at another company wanted to see his restaurant list, Sabeti met with the office manager and learned that ordering lunch was stressful for her, too. He offered to take the logistics of office catering off her hands, and she accepted gratefully.
Sabeti started asking for introductions to other office managers and launched a side hustle ordering food for their companies. He discovered that catering was a common pain point.
After two years of working at Justin.tv, Sabeti gave his notice and launched ZeroCater. The mission was simple and non-technical: "Make it easy for companies to feed their people."
"You can just tell us, for example: We have 74 people, two vegetarians, and one vegan, and want lunch every Monday, Wednesday, and Friday. We create custom orders across a curated list of restaurants, food trucks, and caterers. Awesome foods just shows up and you never have to think about it again," Sabeti wrote in a 2013 blog post published on TechCrunch.
ZeroCater generated revenue on day one. The company charges a small service fee to the customer and takes a percentage of the order from the food provider. After the company raised $1.5 million through Y Combinator in 2011, Sabeti said the company spent capital frugally.
He paid rent on space in a co-working office and spent many nights on a camping cot there.
By 2015, ZeroCater was feeding "thousands" of companies and reached $100 million in sales ,according to Sabeti.
Today, the company has passed a quarter billion in sales to date and reportedly has served "millions of meals" to employees of Salesforce, BuzzFeed, Fandango, Indeed, and Venmo. The San Francisco Bay Area is the largest market, though ZeroCater also serves companies in New York, Los Angeles, Chicago, Austin, and Washington, DC, with more major cities in the pipeline in 2018.
On Tuesday, ZeroCater dropped that it's raised $12 million in a Series B round of funding led by Cleveland Avenue LLC, with participation from Romulus Capital and Struck Capital.
Sabeti describes his new goal as providing "every calorie in the building."
Last summer, ZeroCater rolled out a snacks offering — curating and delivering office snacks and beverages to companies and even setting up refrigerators and shelving on request.
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