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Rebounding from pandemic, Boston’s ezCater raises new cash at $1.6 billion valuation

Stefania Mallett, cofounder and CEO of tech startup ezCater.Craig F. Walker/Globe Staff

When the COVID-19 pandemic started, Stefania Mallett’s company seemed like the perfect victim.

Her Boston-based technology firm, ezCater, helped corporations cater food for in-person events. But as workplaces shuttered and employees were forced to work from home, her business seemingly became irrelevant. Its revenue declined significantly, and it laid off nearly half its workers. The company needed to make a crucial decision: Shut down, change course, or double down.

Ultimately, Mallett, the firm’s cofounder and CEO, decided to double down, shifting ezCater’s customer focus from white-collar firms to factories, warehouse distribution centers, hospitals, and other companies that required in-person work or employed essential workers.

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Now, over a year and a half later, her company has started to rebound, announcing on Wednesday $100 million in new funding, and garnering a $1.6 billion valuation.

For some, ezCater’s resurgence shows the agility of a company that has adapted to the ever-changing pandemic workplace. For others, it shows something deeper — that maybe the alarm bells heralding the death of in-person work are premature, even as uncertainty around the virus persists.

“There’s a big chunk of the United States that cannot work from home,” Mallett said in an interview. “We can feed those people. They have to eat, too.”

Founded in 2007, ezCater was started to make it easier for companies to get reliable catering for business events. It became one of Boston’s fastest-growing companies, and at one point employed over 900 people. In 2019, it was valued by investors at over $1 billion.

But as the pandemic hit, ezCater saw its business collapse. The company’s revenue dropped 85 percent in the early days of COVID. In April of 2020, it laid off 420 employees.

In crisis mode, Mallett remembered the words of John Chambers, the former chairman and CEO of Cisco Systems: “When there’s a disaster, slow down,” she recalled of his words. “You almost always have more time to think about it.”

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She gathered her top staff, and dove into how the pandemic was affecting the business. A few things became apparent: Many companies, either clustered away from big city centers like Boston, New York, and San Francisco or employing essential workers, were staying in-person, and wanted to feed their employees. At the same time, other companies that wanted to keep workers in-person were using food to lure workers to come in.

With that analysis, she shifted her company’s target customers, focusing on factories, warehouse distribution centers, hospitals, sports teams, and government agencies which had employees that could not work remotely. Additionally, the company expanded its service, called Relish, which lets employees of its corporate clients pick out meals from area restaurants, up to a week ahead, to be delivered to their office. The company’s current client list includes real estate giant JLL and the San Francisco 49ers.

And its strategy seems to have paid off, at least for now.

Mallett said ezCater is growing at a faster rate than it did before the pandemic, though she did not provide specifics. With its $100 million infusion of cash, ezCater plans to increase its headcount, currently around 500, by another 350 — inching it closer to its pre-pandemic size. It’s also eyeing potential acquisitions and an expansion abroad, Mallett said. (The funding round was led by Japan’s SoftBank Vision Fund 2, and brings the total amount of investment in the company to $425 million.)

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But as part of this journey, Mallett said she learned much about how the US was discussing the concept of returning to work, noting how different the conversation looks when comparing vibrant city centers to America’s heartland, and pointing out how that shaped her business strategy. (Studies from earlier this year show roughly 79 percent of employees work in-person.)

“Remember last May and June of 2020. We had tumbleweeds in city streets,” she said. “It was just so hard to get people to come downtown, but that’s not what much of the world looked like. Much of the world was still like, ‘We have to go to work, and we’re scared, and we’re not happy about it, but we have to go to work, so ... can you please bring us lunch.”

Bob Luz, president of the Massachusetts Restaurant Association, said he was pleased to hear of ezCater’s progress, but noted it is not a sign that brick-and-mortar downtown businesses are thriving.

“It’s abundantly clear that folks have taken a step back on return to work,” he said, noting how empty Boston’s financial district was recently when he was there for meetings. “It is having a terrific negative effect on all small businesses in the Greater Boston area. Not just restaurants, but all small businesses.”


Pranshu Verma can be reached at pranshu.verma@globe.com. Follow him on Twitter @pranshuverma_.