Angus Davis, Founder and CEO, Upserve
A Series of Profiles of Thought Leaders Changing the Business Landscape: Angus Davis, Founder and CEO, Upserve.
Restaurants are big business. There are some one million of them in the U.S. They employ about one out of every ten Americans in the workforce and account for 20% of all new jobs. Americans now spend more money eating out than they do buying groceries to eat in. It’s a $799 billion market, according to the National Restaurant Association.
Yet as big as the market might be in aggregate, most restaurants are small businesses struggling to survive. Founder and CEO of Upserve, Angus Davis wants to help.
“Every day, 14 million Americans show up to work at a restaurant. That’s 10% of the U.S. workforce. Almost all restaurants have fewer than 50 employees, and most are independent, not part of a giant chain. The restaurateurs leading these businesses run on tight margins. They don’t have a big capital budget. They aren’t software nerds. And most of all, they don’t have much time to get a handle on everything — guests, staff, menu, marketing and finance — making it harder than it has to be to take their restaurant to the next level. We created Upserve software as a smart management assistant that makes it easier to manage guests, staff, marketing, finances, and even the menu,” says Davis.
Founded in 2009, the Providence, Rhode Island based company is backed by First Round Capital, Shasta Ventures, Index Ventures, Pritzker Group and Greylock Partners among others — including a new investment from Vista Equity Partners north of $100 million– to bring order and scale to the “herding cats” process of managing a restaurant. Yet, as large as the market might be, the restaurant business is notoriously hard to serve for technology providers.
“The sector hasn’t received much attention from technology companies prior to ours. Restaurants tend to lag other industry segments when it comes to technology adoption,” says Davis. The typical restaurant operates on thin margins and either can’t afford or can’t devote the time or resources to research and adopt new technologies that could help them. Davis set out to change that dynamic.
“The typical restaurant we work with is probably doing about $1.5 million dollars a year in sales per-location, which is actually about double the size of a typical restaurant,” says Davis. Upserve brings restaurants and the technology that they use into the modern era, with cloud-based, open systems. “The idea behind Upserve is to help restaurateurs operate more efficiently, to help them provide a better experience to their guests, provide better hospitality and to do that by getting them better technology to run their business. Our cloud-based point of sale system called Breadcrumb runs on an Apple iPad, which is much simpler to use, costs a lot less and it works in an open way. It connects seamlessly with other systems, like GrubHub, the largest online ordering platform, for example.”
“Our second product is called Upserve HQ and it’s actually big data for your restaurant. It gives you tremendous insight into what’s happening. It crunches all of the data that flows through your restaurant, data from your point of sales system, data from the payment network, data from online review websites and it puts it all in one place to show you the answer to questions like “who are my best customers” or “which bartender maybe is giving away too many free beers to his buddies” or “which entrée is most likely to turn a first-time customer into a loyal, repeat guest” or “which member of my wait staff performs best and why and what can I learn about her performance that would help me raise the results of some of my other staff members,” says Davis.
Today Upserve is processing about $11 billion in payment volume running on their platform, which is not dissimilar in size and scope to other commerce platforms like Shopify, with around $14 billion to $15 billion on its platform, as a point of reference. The company works with some 10,000 restaurants, has been growing the business at a better than 50-percent-a-year annual growth rate every year and employs nearly 200, most of whom are based in Providence.
“We are a big fish in a little pond here and we’ve made that work for us, but we’re not too far away from Boston. I’m fond of telling my friends in California that it’s a shorter drive from Boston to Providence than it is from San Francisco to Mountain View,” says Davis who knows something about the Bay area traffic perils from his days working at Netscape, the legendary Silicon Valley start-up that helped commercialize the internet. And his journey from his home town of Bristol, Rhode Island to Mountain View, California and back says a lot about how Davis sees the world.
“I grew up in Rhode Island. I wasn’t a star athlete, wasn’t a star saxophone player or in the Drama Club. I was mediocre at those types of things. But I had an after-school job and so that was my thing,” says Davis. At the age of 17 he worked after-school in high school at a local internet service provider IDS.