There have been a handful of major deals this year, and experts say there are more to come. | Image by Nico Heins/Midjourney; logos courtesy of the companies
It’s a good time to buy a restaurant tech company.
The first half of 2025 has already witnessed several major acquisitions. DoorDash bought SevenRooms for $1.2 billion, Wonder closed on delivery service Grubhub for $650 million, and back-of-house giants CrunchTime and QSR Automations announced a merger. And then on Thursday, Olo announced plans to be acquired by investment firm Thoma Bravo for $2 billion. And the deal-making could be just getting started.
The crowded restaurant tech market has long been due for more consolidation. Now a group of motivated buyers is colliding with a large pool of sellers whose prices are coming down, creating the perfect conditions for M&A.
The seeds for this buying spree were planted about five years ago, around the dawn of restaurant tech’s golden age. The pandemic forced more restaurants to start using technology. Investors, emboldened by low interest rates, made a lot of big bets on restaurant tech companies. Hundreds of new startups were born into the frenzy. A QR code supplier raised a $24 million seed round.
But by 2022, the geyser of financing had begun to taper off. Money was no longer cheap, and investors were losing their appetite for restaurant tech amid broader economic uncertainty. In 2021, nearly $12 billion in venture capital funding flowed into restaurant tech globally, according to PitchBook. By last year, that was down to just $1.3 billion. Olo’s stock was down 75% from its 2021 IPO when reports emerged of a potential sale. Many companies are similarly looking to make their next move.
“Restaurant tech is not the greatest end market to invest in,” said Savneet Singh, CEO of POS supplier PAR, which has acquired about half a dozen companies in recent years. Despite the overall size of the restaurant market, most tech providers focus on just a piece of it, he said, which limits their growth.
“A lot of companies raised venture rounds that five, six, seven years later are still single-digit millions of revenue,” Singh said. “And there’s this big problem of, well, no venture funds are going to come in at any valuation that you’re gonna be comfortable with. … So, people are trying to sell.”
He said the number of M&A deals available right now is the highest he’s seen since he joined PAR in 2018. The company currently has a list of 12 to 20 potential targets. “If they have an opportunity, we will pounce,” Singh said.
Antsy founders are not the only ones looking to sell. Investors that came in before and during the pandemic are also nearing their typical five-year investment horizons and heading for the exits.
From 2015 to 2019 alone, about $62 billion was invested in restaurant technology, said Jason Myler, a managing director with investment bank BGL. Then the pandemic hit, pushing investment timelines back a year or two, even as more capital was pouring in. That means a whole lot of companies will be coming to market over the next couple of years.
“The shot clock is on from an investment standpoint,” Myler said. “Whether companies are doing well and they’re going to be chasing really good multiples or they’re not doing as well, you are going to have to find a home.”
The question is, will there be enough homes to go around? In the restaurant tech world, there are only so many companies big enough to swallow smaller ones. But there is certainly an appetite for M&A among those companies, because adding more features is one of the surest paths to growth these days.
“You’ve got to have a lot of value you’re offering the customers to get their attention and to drive your ability to get capital,” said Bo Davis, CEO of back-office software supplier MarginEdge. “It forces us and everyone else in restaurant tech to make sure that we’re doing more and more and more for the restaurants.”
MarginEdge has done that in part by spending more on R&D. But it also made its first acquisition last year, buying the beverage inventory company Freepour so it could offer restaurants a new tool.
DoorDash’s acquisition of reservations and marketing provider SevenRooms followed a similar logic. The $1.2 billion deal will move the company beyond delivery and online ordering and into restaurants’ on-premise business in a big way.
“What you’re starting to see is consolidation around a one-stop shop,” Myler said.
Restaurants watching from the sidelines may have mixed feelings about all this. When a handful of suppliers start to occupy more of the tech stack, that is always cause for some concern.
Giordano’s, for instance, prefers to work with tech companies that are willing to integrate with others, giving the pizza chain the flexibility to choose vendors on its own terms. It worries that the rise of the one-stop-shop could limit its options.
“I encourage competition between the partners, because then everybody wins,” said CEO Nick Scarpino. “If you just build silos and then restrict people from going out [and choosing their partners] … I think that’s just a walled garden, and you get in there and you say, well, now you’re stuck. And I don’t want that.”
He noted that one of Giordano’s tech vendors was recently acquired, and the company is having this exact conversation with them.
But many tech suppliers say they abide by an open approach. PAR offers somewhere in the neighborhood of 650 and 700 integrations, Singh said. MarginEdge will integrate with companies even if they offer competing products, if it will make clients happy.
“While I may offer a feature set that I think is amazing … if [the restaurant] wants to use somebody else’s, god bless them,” Davis said. “It’s my job to make them want to use mine, not to build a walled garden that no one else can get to.”
There could be some benefits to consolidation, too. The restaurant tech market is cluttered with suppliers, and despite the recent M&A, it seems to be expanding rather than shrinking. At the National Restaurant Association Show this year, there were so many tech vendors that the event had to expand its showroom to fit them all. The sheer number of options can be overwhelming.
“I actually think at the end of the day, consolidation will make it much easier and more seamless for restaurants to run their own business rather than trying to manage all these disparate systems,” said Myler.
Singh argued that poor integration between apps is still holding restaurants back. He used the example of how our emails and digital calendars are seamlessly linked.
“Now imagine those are two separate applications, and you’re typing my name in your calendar, and you’re like, ‘Oh, crap. His email’s actually saved in that database. I gotta go over there and copy it over.’” he said. “That’s restaurant technology today.”
Ultimately, whether M&A will be good or bad for restaurants is likely a moot point. Everyone seemed to agree that some consolidation is inevitable.
“These are trends that every vertical goes through over time,” Davis said. “It’s just that the restaurant space happens to be a bit behind.”
True blockbuster deals could still be rare. Those transactions carry more risk, and there are only a handful of restaurant tech companies big enough to pull them off.
“I do think we’ll see more, but I don’t think you will ever see it fast and furious,” Davis said. “That’s very much medium- to later stage in the evolution of the market.”
Still, the conditions are there for some major dominoes to fall soon.
“It’s just a question of capital and multiple,” Myler said. “Sellers are gonna have to come down in their valuation expectations, because it’s not 2021 anymore. But there is absolutely a thesis that says that some large strategic deals get done going forward.”
