Traditionally, firms in California, New York and Massachusetts attract the most investment, according to the National Venture Capital Association.
What Upserve makes
The company helps restaurants analyze data to improve business. CEO Angus Davis said the firm now sells three products:
‒ A point-of-sale program for use on iPads that helps servers enter orders and send them to the kitchen.
‒ An analytics program that helps restaurants learn which menu items are best sellers and which servers do the best job of selling to customers.
‒ A payment-analytics program that gathers data on credit-card users to show restaurants their spending habits.
Even so, “there is a misperception out there that you have to be an entrepreneur living in Silicon Valley, Massachusetts or New York to attract venture-capital investment, but that’s just simply not the case,” said association spokesman Ben Veghte.
Vista Equity Partners has offices in Austin, San Francisco, Chicago and Oakland. It manages more than $30 billion in capital and invests in software, data and technology-enabled organizations. Other firms joined in this investment round — including First Round Capital and Pritzker Group Venture Capital.
Davis said he remains CEO and retains his seat on the board of directors, which is not structured in the traditional hierarchy of chairman and other officers. Vista will join the firm’s board of directors.
In the restaurant technology space, Davis said his firm’s closest competitor is Boston-based Toast Restaurant POS, which bills itself as an all-in-one restaurant technology platform. In January, the firm announced it closed 2016 with more than $2 billion in sales transactions. It raised $30 million in financing early last year.
Open Table, the San Francisco-based restaurant reservations company, doesn’t sell the same types of products as Upserve, Davis said. But the companies are of a similar scale: Upserve manages about 23 million meals a month, while Open Table makes about 22 million reservations a month, Davis said.
A year ago, Upserve acquired Breadcrumb from Groupon to create a cloud-based restaurant management system serving 6,000 U.S. restaurants. The financial terms of that deal were not disclosed.
Davis, who is 39, said he’s committed to Rhode Island.
“We’re not going to move our headquarters from Providence,” Davis said. “I think it would be very unrealistic for a company of this size to change that.”
No small windfall
Upserve founder and CEO Angus Davis says the investment by Vista Equity Partners in his company surpasses the $41.55 million that 28 Rhode Island companies attracted in venture capital investments all of last year, according to the annual report of the National Venture Capital Association.
The Washington, D.C.-based trade association represents the U.S. venture capital industry, which comprises more than 450 member firms.
In the first quarter of 2017, five Rhode Island companies attracted a total of $6.19 million in venture capital, according to the association.
CEO Angus Davis founded Upserve’s predecessor, Swipely, in late 2009. In early 2013, the firm employed 30 people. By 2014, it had attracted $40.5 million in venture capital.
In the spring of 2014, Davis said the privately owned company employed more than 100 people and managed more than $2 billion in annual sales for merchants using its technology.
Now, Upserve manages more than $11 billion in annual transactions, up from $7 billion in March 2016. The firm also manages more than 23 million meals per month, Davis said, up from 11 million a month in March 2016.
Davis said about 95 percent of Upserve’s restaurant customers are outside of Rhode Island — which means the money they pay for Upserve products brings new revenue into Rhode Island. Some Rhode Island customers: The Malted Barley, Brass Monkey, Loie Fuller’s and Jamestown Fish.