A restaurant giant born in D.C. has returned to scoop a local startup into its fold.
Fast-casual salad chain Sweetgreen has acquired D.C.-based Galley Foods in its first acquisition, as it looks to bolster its delivery and logistics game.
The Los Angeles-based chain, which has 93 locations, said the acquisition gives it access to Galley’s logistics technology, delivery operations and production knowledge. Terms of the deal were not disclosed.
Galley will continue to operate in D.C. while its CEO Alan Clifford becomes Sweetgreen's vice president of logistics.
For Sweetgreen, the move gets it closer to expanding delivery options beyond pick-up kiosks, called "Outposts." Its digital ordering platform drives almost half of orders, and it recently outlined plans to hit 3,000 outposts by yearend.
"We're both companies with D.C. roots, and we're like-minded in our mission and in our commitment to our customers to better understand them and meet them wherever they are," Sweetgreen co-founder and CEO Jonathan Neman said in a press release.
Sweetgreen launched out of Georgetown and was based in D.C. before the founders moved its headquarters to Los Angeles. It also plans to partner with Dreaming Out Loud, a D.C.-based nonprofit, to support its healthy food system for marginalized community members.
Galley, founded in 2014, had raised $933,000 in venture capital in April 2017 at a valuation of $8.4 million, according to PitchBook data.
The fate of mobile food is uncertain, as delivery and meal-prep companies struggle to become profitable. Maple had food waste costs making up 26 percent of its revenue before shutting down, and Sprig raised $57 million in funding but pulled the plug in 2017, citing production and delivery costs. Meanwhile, microwavable meal company Munchery raised $120 million before recently declaring bankruptcy, and even Amazon had to shut down its food delivery business.
In the D.C. area, a few young companies are trying to defy those odds.
Arlington's Hungry Marketplace, a platform for personal chefs and catering, recently raised $8 million from investors including Usher, Jay Z’s venture fund and "Top Chef" judge Tom Colicchio. And Alexandria prepared-meal startup Territory recently brought in former Amazon exec Abigail Coleman as its new CEO.
Want more info on Galley Foods? Check out an Inno Q&A with founder Alan Clifford here.
