When the pandemic hit, office catering startup Zerocater's revenue dropped 98%, forcing it to downsize from 450 people to just 35. Its model — providing a platform of caterers to the bustling offices of San Francisco and Silicon Valley — just wasn't working anymore in the work-from-home era.
Now, having survived the worst of the pandemic through frugality, the startup is repositioning itself to offer its services in the new hybrid world of working.
"During that time, we really sat back and thought about what is the world was going to look like for companies as the pandemic subsides, and as companies return to the office, and how in this new world will companies feed their employees," said CEO Ali Sabeti. "What we saw was that really big companies that historically had to spend millions of dollars to build up cafeteria staff with world class chefs, how would they operate in a world where on Tuesday, maybe 1,000 people show up, but on Friday only 150."
The company is now angling its business pitch to take on the large cafeterias of some of the Bay Area's biggest office complexes. It is offering a purportedly cheaper hybrid model where companies can get catering if they expect a lot of employees coming in that day, or individually delivered meals if just a few are going to show up. Employees indicate which meals they want through Zerocater's app, providing a heads up on how many people need to be fed.
Pre-pandemic, the company more focused on smaller companies and event catering, but Sabeti says much of their new growth is coming from larger companies looking to ditch their cafeterias.
Zerocater has recently raised a $15 million Series C led by Cleveland Avenue LLC, with participation from Remus Capital. It's the first time the startup has raised money since 2018.
Sabeti says the company has tripled revenue and doubled head count to 120 in the past 12 months as it rebuilds its business practically from the ground up.
"So when we had our board meeting in the middle of FY 2021, I told the board the pandemic was either the worst thing that ever happened to us or the best thing," he said. "And as it sits today, like it was obviously very painful, but it allowed us to focus on the things that were important and really build products that unlocked a market that we think is just tremendous."
