appealed to everyone and would deliver exactly what people wanted on time. In 2010, he decided to strike out on his own and see if working as a middleman between businesses and food purveyors might be a legitimate business idea. “I went to one of these companies to talk to office manager and said ‘Let me take care of it and you won’t have to worry about it,’” he says. “She seemed so relieved I thought I had something there.”
Last August, ZeroCater raised $1.5 million from SV Angel, Vaizra Seed Fund and angel investors like Keith Rabois and Yuri Milner. The company was part of the Winter 2011 class at Mountain View’s Y Combinator venture incubator.
For both companies, one of the challenges of getting off the ground was convincing food vendors they had a viable business opportunity. “Even we questioned if there was a market for this much catering,” Yungst says. “I think they were somewhat skeptical. But there was no concern for our partners because we weren’t charging them anything. The credibility piece was the thing to overcome.”
Now ZeroCater and Cater2.me each have partnerships with smaller food vendors, taking care of logistics like orders, food allergies, likes and dislikes, transport, relationships with companies, changing staff numbers at growing tech firms and special events. Cater2.me serves regular meals to companies of 10 to about 250 employees, and can cater events of up to 600. Clients include Square, DropBox, Eventbrite and Klout. ZeroCater serves companies with a minimum of 15 employees, and has gone as high as 500 for an event (and says it can go higher). They cater companies including Instagram and BitTorrent.
Cater2.me charges its vendors a certain percentage of every sale, but declines to disclose exactly how much. ZeroCater charges seven percent on top of the cost of food from their vendors, and Sabeti says that some of his top vendors are bringing in $15,000-$25,0000 per month in catering business.
Though both companies enjoy sharing foods they love with area startups, it’s not just about serving engineers a free lunch.
“Our real passion is watching these businesses grow,” Yungst says. “That’s how we find our reward.”
