Pizza tops peoples’ list of favorite takeout and delivery options in the best of times and its popularity soared further in 2020 as restaurants around the country closed to indoor dining and consumers sought safe, tasty and affordable alternatives to their own home cooking.
U.S. pizza restaurants generated about $46.2 billion in sales last year, with independents accounting for about 40% of the total, according to Statista.
It was a growth year for Slice, which provides digital ordering capabilities, point-of-sale functions and other products and services to a network of nearly 16,000 local pizzerias around the country that are looking for ways to drive sales and stay competitive with big chains able to make significant investments in digital innovation.
This week, Slice announced it has raised $40 million in a new funding round led by Cross Creek and featuring other investment firms including 01 Advisors, a venture created by former Twitter executives Dick Costolo and Adam Bain, both of whom are now advisers to the company. The latest influx of capital brings the company’s total raised since its inception to $123 million.
Big tech-savvy chains had an advantage in the pandemic as people sought safe and convenient ways to order and pay for their pizzas, but so did the indies that had already positioned themselves to do delivery, which included about 85% of Slice’s pizzeria customers, founder and CEO Ilir Sela said.
“We were super fortunate to be in a position to help small businesses meet the demands from the consumer side,” Sela said. “For most neighborhoods, the local pizza shop and maybe one of the chains were the last and only options available during the pandemic. That put our small business partners in a position to step up and meet the needs of the community.”
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The pizzerias saw sales and delivery orders soar, but it wasn’t always smooth sailing for those whose operations couldn’t keep up with growing orders.
“Unfortunately…there was a segment who couldn’t match the demand, because of employees not coming to work and, sadly, with some owners catching the virus. A lot of them closed temporarily.”
Those struggles inspired Slice to create the Slice Accelerate program, in which it will invest $15,000 into select pizzerias to provide point-of-sale hardware, services and systems to help struggling small businesses turn things around.
Late last year, Slice acquired point-of-sale software company Instore, which enabled the creation of Slice Register. The point-of-sale system is designed specifically for pizzerias and it gives them a single point for processing all orders and payments and managing deliveries and promotions.
The company has also focused innovation on the consumer side, adding the Slice Rewards loyalty program in which users accumulate points toward a free pizza. The average American orders pizza 18 times a year, Sela said.
Slice Rewards members earn a “slice” for every pizza they purchase through the app and eight slices equals a free pizza from any one of the Slice’s almost 16,000 partner pizzerias.
That compares to only about 6,000 US locations in Domino’s rewards program, Sela said. “It ultimately rewards you for supporting local businesses,” he said.
That tracks wherever the user happens to be. About 75% of the time people are ordering from the same three or four favorite local pizzerias, and the other 25% they’re out to discover something new either in their neighborhood or in their travels.
Sela was born in Macedonia and he grew up in New York in a family where several members operated pizzerias, and his chosen career in tech ultimately brought him back to those roots when he saw a way to help those familiar small businesses be more successful.
He started the company as My Pizza in 2010 and bootstrapped it for six years before changing the name to Slice and raising its first round of capital in 2016.
Slice now employs nearly 900 people, with plans to add about 500 more. The New York City-based company operates five offices, including its headquarters in the U.S. and facilities in Belfast and Macedonia.
“My belief is that talent has no borders but opportunities do,” Sela said. “We’re creating opportunities for talent across the world.”
That attitude of appreciating talent where you find it is also part of Slice’s fundraising effort. The capital raised in each round has been key, but sometimes the expertise is even more important, especially in the latest round that brought Costolo and Bain on board, Sela said.
Experienced advisers provide valuable feedback and guidance as Slice continues to grow and scale its operations, and they also offer deep networks from which to recruit new talent. And the understanding and camaraderie they bring to the table makes it less lonely at the top.
“Where the job of a CEO can feel incredibly lonely, they help alleviate those feelings,” Sela said. “My investors and board members are some of the closest advisers in the company.”
Currently the company’s business customers and consumer base are all in the U.S., but long-term plans call for expanding into international markets in the future. New changes to the app are also on the drawing board, including giving users the ability to search for specialty items like vegan or gluten-free pizza options or cauliflower crusts pizzas.
Neither Sela nor his investors are talking about exact exit strategies yet, but they are looking ahead to a future that could include an IPO.
“We’re at a scale where we’re starting to think about being a public company over 12 to 24 months,” he said. “To me, I’m excited about what we’re doing. It’s early in the industry and I’m excited to do this for [at least another] 10 years.”