Mr. Waiter’s meteoric rise as a tech startup was ultimately tarnished by ill-advised acquisitions, dwindling cash and years of declining revenue, according to an Acadiana Advocate analysis. .
The delivery company, which was acquired by Texas billionaire Tilman Fertitta’s Landcadia Holdings in 2018 for $308 million and later rebranded as ASAP in 2022, was acquired by Minnesota-based Byte Co., Ltd. in 2019. After its initial acquisition, Squad struggled until founder and CEO Chris Moe and the company parted ways. Method.
After that, a series of layoffs occurred, the company’s stock was removed from the Nasdaq due to poor performance, and last June the company decided to end its own delivery service and instead contract with Uber Technologies.
Finally, on Monday, the company that was a shining star among Louisiana startups five years ago filed for Chapter 7 bankruptcy. Parent company Waiter Holdings said in a filing in federal bankruptcy court earlier this week that it has debts of up to $100 million, 999 creditors, and assets of less than $50 million.
Waiter Holdings’ stock price was $14 a share in March 2019 and 42 cents just before it was delisted last spring.
Mr Mo said the news of the company’s demise brought “disappointment and sadness”. He wondered if Lake might have turned out differently if he had still been with the company that was born from an idea he drew on a napkin at Charles’ Coffee shop.
“It was actually a bitter day,” Mo said of the day he announced the closure of Waiter Holdings. “In my mind, if I had still been there, would the end result have been the same, or would it have been better? It’s pretty tragic, and at least in my opinion, it doesn’t have to be that way. There wasn’t.”
To some, its demise may have been inevitable, as Lafayette’s profile declined and the company’s leaders who had played key roles in its early years left for other jobs.
However, many in the startup lane still pointed to Waitre’s footprint in the area. Mandy Mitchell, president and CEO of the Lafayette Economic Development Authority, said many of the early companies involved were behind other local technology startups, including hampr, FlyGuys, Something Borrowed Blooms and Keepers. It is said to be the main driving force.
She said it was sad to see the company come to an end, but it showed the region’s potential for tech startups.
“On average, a typical exit like the one they went through usually takes nine-and-a-half to 10 years. They got it done in five,” said Opportunity Machine, which housed Waitre in the early days. Director Destin Ortego said. “From a startup standpoint, this brought a lot of attention to Lafayette and the state of Louisiana as a whole. Chris Meaux showed that you can raise that kind of funding for that kind of startup in Louisiana as well. .”
Now, early players and others who fell in love with the company are left wondering what could have been. Why did a management team that traveled to New York to celebrate the opening of the Nasdaq stock market in 2018 and bring in Saints quarterback Drew Brees as an investor disappear less than five years later?
Whitney Savoie, who left Waiter in 2020 and is now with Fly Guys, said, “The waiter I knew and loved passed away three or four years ago, and I’m okay with that.” . “In a perfect world, Waiter would have gone public and continued to grow, becoming a sustainable company that would last forever. Unfortunately, that didn’t happen.”
her name was donna
The story of how the waiter hatched has been told many times, but it’s still great storytelling.
Mo recalled coming back from a startup conference with an idea and emailing computer science professors at LSU, the University of Louisiana at Lafayette, and McNeese State University about it.
An instructor at McNeese University connected him with students Adam Murne and Manuel Rivero. They gathered at a coffee shop in Lake Charles for their first meeting and wrote their ideas on napkins.
Mo, who is in the early stages of writing a book about his entrepreneurial experience, recalled how Donna, the barista there, stopped them before they left.
“She said, ‘Hey, can I get that napkin and can you all sign it?’ I was listening to everyone talking and I thought it was going to be a big deal. ” he said. “So we all signed a napkin and gave it to her. I thought, well, we’re never going to turn this into anything.”
What emerged from this meeting was the idea of ordering food on your device and having it delivered. The idea was launched in Lake Charles and then in Lafayette in 2015 with his more than 100 employees. Two years later, Lafayette was the only waiter he was handling 2,000 orders per day.
Brian Horton, who attended the Lafayette launch as manager of the customer service team, noted how his staff was excited about the company’s growth. Orders went from 200 to 10,000 a night, and Mo was often on the front line.
“We all kind of agreed,” Horton said. “We were very close-knit and solved problems on the spot, rather than upper management making decisions. We were finding and implementing solutions together. All of us. was a part of it, so it was all very exciting.”
And it was a very fun workplace. Matthew Lundmark said he joined the company in 2016 and recalled having nap pods and video games in the office. Employees were able to play table tennis. Upper management cycled through the office.
Moe said employees were given unlimited paid time off as long as their jobs were not affected and a replacement was available.
“It was fun and I was focused,” Lundmark said. “It was as if we were all working together toward a bigger, broader goal.”
Waitr was growing rapidly and emerging in mid-sized markets in the Southeast. Joe Storr, a founding director and later president, said the company has posted triple-digit growth for three years in a row.
As the company grew, Mo made smart moves like hiring Dave Pringle as chief financial officer and Sonny Mayugba as chief marketing officer. When they joined Waitr, they were both working in Silicon Valley.
“This was probably the most important positive turning point that allowed Waiter to grow so explosively,” said Stoff, who is now CEO of Fly Guys. . “Those two guys were rock stars. We made a great team with Chris, and Chris made the decisions. Chris is really gifted at making quick, instinctive decisions. did.”
By the time of the merger, Waitr had a presence in 230 cities, partnered with 6,200 restaurants, employed approximately 8,000 drivers, and employed approximately 400 people at its headquarters in Lafayette, Lake Charles and other markets. was doing.
It was big news that Mr. Mo was selected as a finalist for the 2019 Gulf Coast Entrepreneur of the Year award. It was even bigger news when he won the award.
“I installed an anchor in the company.”
When Waiter went public on November 16, 2018 after the merger, its stock price was $11.81 at market close that day. The next day, the company had more than $200 million in cash in the bank and a burn rate of $1 million a month, Stoff said.
Two months later, the company announced it would acquire Minneapolis-based rival Byte Squad for $323 million. This has doubled the company’s footprint to more than 500 cities in 22 states.
But it was also the most expensive move, and it was a turning point for the waiter, Stoff recalled. While the pre-merger board did not like the idea of acquiring Bite Squad, the post-merger board did not like the idea of acquiring Bite Squad, but the post-merger board did not like large companies like DoorDash and GrubHub, which were entering the mid-market market with a lot of capital. It has given the go-ahead to acquisitions as a quick way to compete with companies and grow. More money.
Bite Squad was spending $3 million a month and was seeing market share decline in most of its major markets.
“Basically, we just put an anchor on the company,” said Stoff, who was not a board member at the time. “The new board obviously wasn’t excited about the Bite Squad merger, but we had to accept it. All the cash was gone. If we just kept stroking it, only good things could happen. It shouldn’t have happened. Or at least it’s neutral.”
The company began reducing its workforce by June. The company’s stock price soared from $13.86 in March to 25 cents in November.
Moe recalled that the two companies’ cultures did not mesh well.
“We were a work hard, play hard kind of company,” he said. “At Bite Squad, there was a culture where you had to work all the time and he couldn’t take more than two days off at a time. Even the personalities of the people who worked at both companies were different. It was It started to cause dissatisfaction on both sides.”
Then an even bigger bombshell happened. On August 8, Mr. Moe and Mr. Waitre separated, with Mr. Moe remaining only as chairman of the board. The company’s market value has fallen from $910 million just five months ago to $134 million.
Moe said he and the board had reached “an amicable agreement regarding my departure.”
The company ended the year with a $291 million deficit and announced large-scale layoffs in March 2020. The coronavirus pandemic gave the company a slight tailwind, but it reported a loss of $77 million through the first quarter of 2022.
The quality of customer service also started to decline. Crystal DeVille of Lane said she started using Waitr five times a week about three years ago before it became less reliable and more expensive.
It cost the waiter $7 to send food from Lane to Crowley, but it cost DoorDash just $3. Sometimes her order to the waiter was not assigned to a driver.
“So we had up to two hours to wait for our food, you know, it was cold,” Deville said. “Otherwise they won’t understand it at all and you have to go and pick it up yourself. Cancel the order and go pick it up yourself and they’ll give you your money back.” Sometimes it took several days to receive it.”
Mary Pepper said she had similar experiences while working at CC’s Coffee, including a waiter ordering more than the cafe had in stock. Employees tried to contact Mr. Waitl afterward, but his calls were often unanswered.
Ben Herrera, a Lake Charles restaurateur who was also an investor and employee of Mr. Waiter, said things changed after he signed with Bite Squad. In the early days, Mr. Waiter received a cut of about 4% on each take-out order from the restaurant, but that rate increased several times and he eventually received up to 25% on each order. I did.
In 2019, some restaurants participated in the Waitr platform blackout.
“I think Mr. Waiter created a lot of resentment and animosity with the employees who were instrumental in the growth of the company,” Herrera said. “While some people may not have those feelings, many were collateral damage from large companies downsizing and trying to cut operating costs to increase profits. .”
Mayugba, now back in California and working with other technology companies, says Waiter’s death didn’t have to turn out this way. As the concept of food delivery becomes more popular, it could remain today as a stronger player in the market, or as part of DoorDash or GrubHub.
“We actually owned the territory from Texas to North Carolina,” he recalls. “I think I had a choice to join one of those big players or stay a regional player and compete with them. It was all based on different decisions and what led to that. I don’t know why, but it’s so unfortunate.”
