Fast-casual restaurant chain Cava has raised $190 million to fund its expansion, the company announced Tuesday.
T. Rowe Price Group led the round along with participation from The Invus Group, Declaration Partners, Equilibria Partners Management, Mousse Partners (all of New York), Leesburg-based SWaN & Legend Venture Partners, D.C.-based Revolution Growth and Lighthouse Investment Partners of Palm Beach Gardens, Florida.
The fresh funding would bring the D.C. company's total raised since its founding in 2006 by Ted Xenohristos, Ike Grigoropoulos and Dimitri Moshovitis to just under $650 million, according to data from PitchBook.
The money will help support the restaurant group’s continued expansion into “several new markets,” including 14 locations in Atlanta, in 2021, according to a release. It will also help convert 50 Zoë's Kitchen restaurants into Cavas in 2021 — with more conversions on the way for 2022, according to a Bloomberg report. Cava purchased Zoës in 2018. The company did not answer questions on where else the company plans to launch.
But the company's plans are much larger: it aims to have a total of 500 Cava outlets operating by 2025, Bloomberg reported. There are currently 113 Cava locations and 176 Zoës locations across the U.S., according to the report.
The company did not detail how many Zoës locations in Greater Washington would be converted to the Cava brand, but CEO Brett Schulman said in an email that the company was continuously evaluating each location based on financial performance, guest feedback and population trends.
He highlighted that Cava recently converted a location in Owings Mills, Maryland to Cava and it is performing "significantly above expectations due to high demand for Cava in that market."
Schulman said its focus for now would be on converting Zoës locations to Cavas.
"Typically when we convert a Zoës Kitchen to a Cava, the restaurant’s performance significantly and immediately improves, delivering 50-75% higher in average weekly sales," he said in an email.
But the balance of the group's two brands has already shifted significantly since Cava took Zoës private in a deal financed by a group of investors led by Panera founder Ron Shaich. When that deal was announced in August of 2018, Cava had 66 locations and Zoës 261.
Schulman did tell Bloomberg Tuesday that converting a Zoës to a Cava takes half the time and money of opening a new store. In March, Cava told Food Dive that it had completed seven Zoës-to-Cava conversions and had 12 more on the docket.
Revenue from Cava's digital operations grew 140% during the pandemic compared to the previous year, and 30% of its total revenue was coming from business lines that didn’t exist pre-Covid, including curbside delivery, Schulman told CNBC in March.
Cava will also continue to expand its packaged dips and spreads business — which it sells in Whole Food Market and other grocery stores — saying it plans to further invest in products that “meet guests’ needs within the home” as well in its digital technology.
Bloomberg reported that the funding round values the company at close to $1.3 billion, which would make it one of Greater Washington's newest unicorns, a term used for private companies valued at $1 billion or more.
The company raised $40 million in late 2019, according to an SEC filing at the time.
