Exclusive: Compass Group Acquires EAT Club

Food services company Compass Group USA has acquired Redwood City, California-based EAT Club, a corporate food-delivery technology platform, the companies told Crunchbase News. Terms of the deal were not disclosed.

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EAT Club is now part of Compass Digital Labs, led by CEO Jugveer Randhawa, and its technology will lead Compass’ efforts of providing customers in the business and industry, education and health care areas with their workplace dining needs as companies return to work following the global pandemic.

“Given the pandemic and market trends, EAT Club offered us a mature technology that we could get to market quickly and provide a more adaptive food delivery model to clients,” Randhawa said. “We have dabbled in distributive delivery models for some time, as well as mobile delivery at our corporate campus customers, but this deal brings together a catering business with a café business.”

EAT Club, founded in 2010, focuses on being a virtual cafeteria, offering individually ordered and packaged meals in one synchronized delivery for companies that don’t have a dedicated dining option in their buildings, said Doug Leeds, EAT Club’s CEO who will retain that role at Compass.

Prior to the acquisition, its services were being used by approximately 1,000 companies, including Google and Postmates, he added.

EAT Club has 800 employees, and experienced a downturn during the pandemic that involved cutting jobs, Leeds said, which led the company to pivot its focus to its technology.

“When the pandemic hit, we were doing full-stack food service, which included making and delivering food ourselves,” Leeds said. “At this time last year, we thought people would come back to the office soon, but realized it was not going to be soon and we needed to change the model and the technology.”

EAT Club built a SaaS platform that sits on top of other food production and logistics platforms, he added. While piloting the technology with Compass, Leeds said he realized that together they could provide a better service.

The company has raised $46.5 million in known venture capital rounds, according to Crunchbase data. Leeds said there was an additional funding round, but did not go into specifics. The company also made two acquisitions of its own, including Taro in 2019 and Farm Hill in 2018, that are part of the acquisition.

“Doug has built a great team, and they are staying intact,” Randhawa said. “We are now scaling and will implement EAT Club’s technology across the U.S. in new and better ways.”

Illustration: Li-Anne Dias