For Upserve CEO Sheryl Hoskins, the startup's sale to Canadian e-commerce and point-of-sale company Lightspeed was a natural step — and a model for how startups can grow and succeed in the Ocean State.
The 11-year-old Upserve was sold to Lightspeed for $430 million in cash and stock last week, spurred by majority backer Vista Equity Partners. The Upserve brand as we know it will dissolve; Lightspeed will integrate Upserve's restaurant platform software into its portfolio and use it to fuel its U.S. expansion.
It's the end of an era for 11-year-old Upserve, the top-funded and most-well-known startup in Rhode Island. But Upserve's legacy in Rhode Island's innovation scene will live on for quite a while.
"The team and I are super excited about this," Hoskins said. "There's no plans to leave Rhode Island. I'm not going anywhere."
Upserve was founded in late 2009 by Angus Davis, who turned the company over to Hoskins in late 2018 and is now a partner at Foundation Capital. The Bristol native has a storied entrepreneurial journey. At 18 years old, he left for the West Coast and became the youngest full-time employee at Netscape before leaving to co-found a speech recognition startup called Tellme Networks. Davis, with his co-founder Mike McCue, grew the company to over $120 million in revenue and over 300 employees before selling it to Microsoft for over $800 million in 2007.
Davis’ connections to Rhode Island remained strong, and after staying at Microsoft for two years, Davis decided to move back to his home state and start Upserve. Lil' Rhody didn’t have much of a reputation as a startup hub back then, but as Davis told Rhode Island Inno in 2017, he persuaded VCs to invest by capitalizing on his previous successes at Netscape and Tellme.
That bet has now paid off. Over the course of nearly a decade, Davis and his team grew Upserve into Rhode Island's top-funded startup, with backing from First Round Capital, Pritzker Group Venture Capital, Greylock Partners, Index Ventures, Shasta Ventures and Vista Equity Partners.
"I think it's a great case study for other technology companies that may be interested in coming to the state, as an example of a startup from way back — 11, 12 years ago to now," Hoskins said. "It can definitely showcase the potential that can happen in Rhode Island."
More growth for Upserve
Hoskins will retain a yet-to-be-defined executive role at Lightspeed, but she wasn't planning to go anywhere anyway. Under her leadership, Upserve has maintained a strong relationship with major local players, including Rhode Island Commerce and Brown University, from which Upserve has hired many an intern.
Lightspeed won't lay anyone off with the acquisition, the firm's CEO Dax Dasilva confirmed in an interview. Instead, the integration is likely to provide more growth opportunities for Upserve employees, who will now have the opportunity to work with colleagues around the world.
"I can't say enough how excited I am, and the team is excited to be part of the Lightspeed family," Hoskins said. "I told the Upserve team, I am so proud of what they have accomplished over the last couple years to get us to this point. It's no small feat."
That holds especially true for 2020. As a restaurant management platform provider, Upserve saw the needs of its customers change rapidly amid the pandemic. Proprietors who had long used Upserve for in-person ordering and payment processing stopped using those features altogether with the close of indoor dining. Upserve had an online ordering platform, but most clients weren't aware of it. The team — which had also just begun working remotely — had to reach out to individual restaurants to let them know about that option, then revamp the platform to make online ordering more efficient.
The pivots worked, for the most part. From February to April, the startup saw a 169 percent increase in restaurants using its online ordering platform, spokeswoman Amber van Moessner told Rhode Island Inno for a feature this summer.
Now, as its leadership team noted on an investor call last week, Lightspeed sees Upserve as a key part of its post-pandemic future as restaurants in countries that have effectively corralled the coronavirus open back up.
"We see lots of promise and potential," Hoskins said. "Investment is up. We’re very excited and bullish about the opportunity here."
