Delaget

Navigating Industry Headwinds with Strategic Growth Capital

When RAC first met the Delaget team in 2021, through an introduction made across the Riverside Network, they had demonstrated strong customer results and retention metrics that validated their product-market fit. However, growth was still modest, partly due to the significant impact the COVID-19 pandemic had on the restaurant industry. Many QSR operators were focused on survival rather than investing in new technology solutions.

Despite these headwinds, Delaget's leadership team saw opportunity ahead. They were looking to fuel their growth with non-dilutive capital, hoping to build out a new product area and increase company value ahead of a planned acquisition. Rather than pursue an equity round during uncertain market conditions, they wanted capital that would allow them to invest in growth while maintaining optionality.

RAC provided the solution they needed. We made our first growth loan investment in February 2022, enabling Delaget to pursue their expansion strategy without triggering a valuation event before they felt ready. Through our Acceleration Program, we supported the company in focusing on three key areas: refining the sweet spot in the market where their existing products would be most highly valued, adding marketing and sales resources to expand their capacity for customer acquisition, and ideating on new products that could provide significant cross-sell opportunities to their existing customers. 

Accelerating Growth Through Strategic Focus

To enable better resource allocation and help validate their go-to-market strategy, we leveraged our Scale IQ platform to help crystallize Delaget's addressable market and fully document their ideal customer profile. We developed a scoring algorithm that they could use to execute more targeted marketing campaigns, which helped improve both marketing and sales efficiency without increasing spend.

This strategic focus paid dividends. Delaget grew to serve over 14,000 restaurants. Meanwhile, the new product area they had been investing in grew to represent over half of the company's revenue.

Building on this momentum, we made a second growth loan investment in December 2022 and continued to work closely with their team. Through RAC Recruiting, we supported their build-out of the go-to-market organization to help accelerate the pace of growth. To help shorten time to productivity with the growing team, Delaget also utilized the sales training modules within the Scale IQ platform, which gave them a repeatable framework for onboarding new team members and reinforced expert selling fundamentals.

Innovation and Market Expansion

Some of our recruitment activity also focused on the product organization to help with delivery of new products needed to execute on the cross-sell strategy. With a significant chunk of their revenue coming from major delivery platforms like DoorDash, Uber Eats, and Grubhub, we identified an opportunity to launch a new Recovery product to help restaurant operators recover lost revenue from delivery orders by automatically identifying and disputing recoverable losses.

This new technology proved to be a success, and by the time Delaget was preparing to sell the business, it had become a significant growth driver. The Recovery product demonstrated the power of leveraging Delaget's existing data integrations to help solve additional operational challenges for their restaurant customers.

Throughout this growth journey, we increased our investment over two additional tranches and a convertible note - highlighting the value of a long-term capital partner providing the right capital at the right time as business needs evolved.

A Strategic Exit and Successful Partnership

When Delaget felt ready to pursue an acquisition, RAC provided hands-on support throughout the process. We helped them interview investment bankers and made several introductions across our network.

In December 2024, Delaget was successfully acquired by PAR Technology Corporation for $132 million. By this time, Delaget had grown to serve over 30,000 restaurant locations with 125+ brands among their customers, including 40 of the top 50 North America-based restaurant concepts. Per the announcement, the acquisition represented a strategic milestone for PAR's mission to build the industry's most comprehensive foodservice platform, with Delaget's analytics capabilities nicely complementing PAR's existing Operator Cloud solution.