Cava Group Inc., a Mediterranean fast-casual restaurant chain, completed a $190 million financing round that will help hasten the company’s expansion.
The funding brings the value of the company close to $1.3 billion, according to a person with knowledge of the matter who asked not to be identified. The Series F round was led by T. Rowe Price Group and investors including the Equilibra Partners Management, Lighthouse Investment Partners and Declaration Partners.
Cava has ambitious expansion plans and is converting many of the Zoës Kitchen outlets acquired in 2018 into its namesake brand. Management plans to have 500-plus Cava outlets operating by 2025, including 14 newly converted spots in Atlanta scheduled to open by October. The conversion strategy allows the company to open new restaurants on an expedited schedule.
“Half the cost, half the time,” Chief Executive Officer Brett Schulman said in an interview. “It allows us to achieve instant, market-wide entry in a matter of months instead of years.”
Cava restaurants serve healthy fare typically associated with the oft-lauded Mediterranean diet, like lentils, pita, hummus and feta cheese. The company also has branded dips, spreads and sauces sold by chains like Whole Foods Market. There are currently 113 Cava and 176 Zoës locations, with plans for more than 50 conversions this year and more in 2022.
While its salads and bowls easily fit into the market for pre-pandemic desk lunches for urban professionals, the Washington, D.C.-based chain has found growth opportunities amid Covid-19 in the suburbs and at dinnertime, thanks in large part to its online presence, Schulman said.
“Covid only served to accelerate trends that were slowly growing prior to pandemic,” Schulman said, listing “a continued shift to suburban living, and acceleration of digital-channel usage.”
While Schulman expects patrons to come back to restaurants quickly, he emphasized that the chain’s digital capabilities have served the company well and will continue to do so. Cava offers curbside pickup and has its own app, with orders outsourced to DoorDash. Its menu is also accessible through Uber Eats.
Other fast-casual chains are also expecting post-pandemic booms. Chipotle Mexican Grill Inc. has put on 19,000 staff and managers to chop veggies and cook meat on grills over the past couple of months. Meanwhile Colorado-based Noodles & Co. plans to open 10 new stores this year after unit growth stalled last year amid the pandemic.
Daniel Lubetzky, whose family office Equilibra Partners is a Cava investor, emphasized the ease of ordering through the app and the freshness of the ingredients, which he sees as appealing to consumers, pandemic or not.
“Fundamentally, more and more people are going to navigate towards healthier options,” he said. “Cava is premium enough that people can appreciate quality ingredients, accessible enough that plenty of Americans can take a very healthy meal.”