There’s an old joke about how to make a million dollars in the restaurant business — start off with $2 million. But Restaurantpro.com has no intention of seeing its funding disappear faster than a tasty tortilla. In fact, the San Francisco-based B2B startup just received a whopping $29 million in series C financing following a pre-launch $9 million investment in January.
“What we do is expensive, that’s why we’ve raised close to $40 million,” says Christopher Hemmeter, founder and CEO of RestaurantPro. The RestaurantPro e-procurement system is a comprehensive suite of tools designed to deliver complete and accurate information to help restaurants manage the entire procurement process, from ordering to receiving to inventory and cost management.
But if its costs are high, they are far more than matched by the size of RestaurantPro’s target market. The company is an application platform developer and hosted service provider aimed at the $376 billion foodservice industry. “In many cases we are working with companies that are getting onto the Internet for the first time,” says Hemmeter. To date, he says RestaurantPro has installed 50 systems since July at companies that are actively using them for transactions. A total of 200 companies have committed to using RestaurantPro’s software and services, according to Hemmeter. Earlier this month, RestaurantPro launched version 2.0 of its software. At present, RestaurantPro’s customers are in San Francisco and Chicago.
“We’re waiting until after the holidays to be more aggressive about installations,” says Hemmeter. “Up until April, the Internet business was more of a land grab and about getting as many customers as you could, whether you were ready to support them or not. Today, we don’t feel we have any competitors and our focus is on quality and supporting our customers.” Hemmeter claims RestaurantPro has a backlog of customers and even other markets it intends to pursue in the year ahead.
“Early investor euphoria for anything B2B is being replaced by calculated investments in companies that play at the core of industry trade,” says Chuck Donchess, Chief Strategy Officer of Commerce One, a leading provider of global e-commerce solutions for business and an investor in CriticalArc which uses its technology.
In a related announcement, the company announced the adoption of a new corporate name, CriticalArc Technologies, Inc. . The new name represents an expansion of RestaurantPro’s business scope to include the development and hosting of enterprise solutions that streamline business processes for and between trading partners in dynamic industries, such as foodservice. Restaurantpro, the company’s flagship product, remains the branded interface for high-end, independent restaurants and the distributors that service them.
The company lays claim to being the only platform developer in the B2B space to deploy cutting edge integration technologies that enable small, specialty distributors to display product pricing, availability and promotional information to their customers over the Internet in real-time. CriticalArc plans to announce a number of technical products and services for foodservice trading partners in the coming months.
CEO Hemmeter has 13 years of hands-on experience with the vicissitudes of the restaurant business. He is founder of the popular E&O Trading Company restaurants in San Francisco and San Jose.