One of the year’s biggest capital raises by a Wisconsin startup just got bigger. Madison-based EatStreet announced today that it has tacked on $4 million to its $6 million Series B round announced in April.
The new investors in the expanded Series B round are 4490 Ventures and the State of Wisconsin Investment Board (SWIB), both based in Madison. This marks one of the first investments by 4490, a new $30 million fund targeting Wisconsin infotech companies. 4490, which is backed by SWIB and the Wisconsin Alumni Research Foundation, invested in Madison-based apartment search website Abodo earlier this year.
EatStreet has now raised more than $12 million from investors since launching its online restaurant ordering service in 2010, according to the company and SEC documents.
EatStreet has enjoyed explosive growth this year. The company has signed up about 15,000 restaurants in 125 cities, up from 5,500 eateries in 75 cities in April. By the end of the year, EatStreet expects to be in 20,000 restaurants in 150 cities, EatStreet co-founder and CEO Matt Howard said in an interview. “Our original goal was 15,000 by the end of the year, but we’re already at that number now.”
The startup began the year with 31 employees and has ballooned to 80 staff. EatStreet moved into a larger downtown Madison office last year, but will likely need more space again next year when its staff exceeds 100 people, Howard said.
EatStreet has grown “a lot faster than we thought it was going to be, but I can’t complain there,” Howard said.
The company will use the cash infusion to hire more software engineers, develop its mobile apps, and expand to more restaurants.
This year, EatStreet redesigned its website and mobile apps and added features that let users schedule future orders, pay with PayPal, and earn exclusive coupons at restaurants. A new partnership with Yelp integrated EatStreet’s service with the restaurant review website. The company also launched a marketing campaign in September targeting university campuses nationwide, which EatStreet said has helped it more than triple year-over-year sales.
Plenty of startups have fallen into the trap of growing too fast and biting off more than they can chew. But Howard doesn’t think his company’s eyes are bigger than its stomach. For one, EatStreet has honed its process of bringing on new restaurants, and is now successfully signing up more than 1,500 new ones per month, Howard said.
“We’re pretty confident we can go as fast as we need to go,” he said. “We decided we can definitely handle it. That’s part of the reason why we raised additional capital.”
