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SpotOn Raises $ 300 Million at $ 3.15 Billion Valuation, Acquires Appetize – TechCrunch


Around the same time last year, SpotOn was set to announce a $ 60 million Series C funding round for a valuation of $ 625 million.

Fast forward to almost exactly a year later, and a lot has changed for payments and software startup.

Today, SpotOn announced that it has closed a $ 300 million Series E financing that values ​​the company at $ 3.15 billion, more than 5 times its valuation at the time of its C round, and significantly more. than its valuation of $ 1.875 billion in May (yes, just three and a half months ago) when it raised $ 125 million at a Series D fundraiser event.

Andreessen Horowitz (a16z) led both the D and E series of the company, which claims to have experienced 100% year-over-year growth and triple revenue in the past 18 months. Existing Investors DST Global, 01 Advisors, Dragoneer Investment Group, Franklin Templeton and Mubadala Investment Company also doubled their investments in SpotOn, joining new funders Wellington Management and Coatue Management. Advisors Douglas Merritt, CEO of Splunk, and Mike Scarpelli, CFO of Snowflake, also investments as angels. With the new capital, SpotOn has raised $ 628 million since its inception.

The latest investment is used to fund the acquisition of another company in the space – Appetize, a digital and mobile commerce payment platform for businesses such as sports and entertainment venues, theme parks and zoos. SpotOn is paying $ 415 million in cash and stocks for the Los Angeles-based company.

Since its inception in 2017, SpotOn has focused on providing software and payment technology to SMEs, with a focus on restaurants and retail businesses. The acquisition of Appetize significantly expands SpotOn’s reach into the corporate space. Appetize will be marketed as SpotOn and will focus on growing its customer base, which already includes an impressive list of companies and organizations including Live Nation, LSU, Dodger Stadium and Urban Air.

In fact, Appetize currently covers 65% of all major league sports stadiums, specializing in contactless payments, mobile ordering and menu management. So, for example, when ordering food at a game or concert, Appetize’s technology facilitates payment in various contactless ways through point-of-sale (POS) devices, free kiosks. service, portable devices, online orders, mobile devices Web and API integrations.

Image credits: SpotOn

SpotOn takes on Square in payments. But the company says its offering extends beyond traditional payment processing and point-of-sale software. Its platform aims to give SMEs the ability to run their businesses “from creating a brand to accepting payments and all the rest.” SpotOn’s goal is to be a “one stop shop” by incorporating tools such as custom website development, scheduling software, marketing, appointment scheduling, review management, analytics and digital fidelity.

The combined company will have 1,600 employees – 1,300 from SpotOn and 300 from Appetize. SpotOn will now have more than 500 employees in its product and technology team, according to co-founder and co-CEO Zach Hyman. It will also have tens of thousands of customers, a number that SpotOn says is growing by “thousands more every month.”

The acquisition is not the first for SpotOn, which also acquired SeatNinja last year and Emagine in 2018.

But in Appetize, he saw a complementary business in both its go-to-market and technology stacks, and a “natural fit.”

“SMBs will benefit from scalable technology that can grow with them, including things like kiosks and offline modes, and for Appetize business customers, they will be able to take advantage of products like loyalty programs. sophisticated and extensive marketing capabilities. “Hyman told TechCrunch.

SpotOn didn’t necessarily plan to lift another round so soon, Hyman added, but the opportunity presented itself to acquire Appetize.

“We spent a lot of time together and it was too convincing to pass up,” he told TechCrunch.

For her part, Appetize – who has raised more than $ 77 million in her lifetime, according to Crunchbase – also saw the combination as logical.

“It was important for us to keep a stake in the company. We weren’t looking to cash in, ”said Appetize CEO Max Roper. “We are deeply invested in growing the business together. This is a great victory for our team and our customers in the long run. It’s a rocket we’re thrilled to be on. ”

There is no doubt that the COVID-19 pandemic has only heightened the need for more digital offerings from small businesses to businesses.

“There has been a strong demand for our services and now that businesses are facing a resurgence of Covid, no one is shutting down,” Hyman said. “So they see a responsibility to install the technology necessary to properly run their business.”

One of the initiatives taken by SpotOn, for example, is to launch a vaccination alert system in its reservation management software platform to make it easier for consumers to confirm that they are vaccinated for cities and towns. States that have these requirements.

Clearly, a16z General partner David George was also optimistic about the idea of ​​a combined company.

He told TechCrunch that the two companies are coming together “extremely well.

“It was obvious to us that we wanted to lead the round and continue to support them,” said George.

Since its first investment in SpotOn in May, the startup’s growth has “exceeded” a16z’s expectations, he added.

“When businesses grow as fast as they are organically, they don’t need to rely on acquisitions to fuel their growth,” he said. “But the strategic rationale here is so strong that the acquisition will only supercharge what is already strong growth.”

While Series E capital primarily funds the acquisition, SpotOn continues to double its products and technology.

“Now is the time for us to shine and invest in the future with cutting edge technology,” Hyman told TechCrunch. “We’re thinking about things like how are consumers going to order their beer at a Dodgers game three years from now? Will they stand in line for 25 minutes or will they interact and purchase goods in other unique ways? These are the things that we seek to resolve.