For more than 35 years since its founders emigrated from Lebanon to the Bay Area, La Mediterranee has served falafels and tzatziki to locals in San Francisco and Berkeley. It’s one of the longstanding local businesses that has managed to cross over with San Francisco’s more tech-centric crowds.
That’s because of a partnership with ZeroCater, that is now bringing more than $1 million in revenue to at least 20 separate small business owners across the Bay Area.
“There is a lot of talk about gentrification and displacement in San Francisco. I suppose in some ways we’ve had a beneficial relationship. This has given us an opportunity to reach out to customers that we didn’t reach before — a younger crowd that’s more health conscious,” said Vanick Der Bedrossian, who joined his father’s business. “This is allowing us to manage the very high cost of doing business in San Francisco from the rents to the city’s special payroll tax to its health care measures. We need to keep business brisk to keep up.”
Der Bedrossian said there’s typically a revenue slump between lunch and dinner that restaurant businesses have to cover, and startup catering helps cover that gap.
Other businesses that have been able to do more than $1 million in revenues include Fumie Ito’s catering business Sweet and Natural. She’s a one woman show and she outsources her customer service and payments to ZeroCater.
“We don’t work with any chains at all,” said ZeroCater’s CEO Arram Sabeti. “It’s almost exclusively mom-and-pop businesses. This has been one of the more rewarding perks of starting this company — meeting amazing small business owners along the way.”
Sabeti said his company had done more than $100 million in sales so far and it has about 99 employees. He did not disclose what the company’s margins were. ZeroCater has raised $1.5 million to date, mostly from other YC members including Twitch co-founder Emmett Shear and partner Paul Buchheit.
Food tech, of all kinds from Munchery to Soylent, has raked in north of $1 billion in funding over the past year. Overall, Sabeti says that business-to-business catering is a $18.5 billion market in the United States.