It appears that consolidation in the food services/restaurant industry is well underway---and given the sheer number of startups targeted this space with disparate offerings, the M&A activity certainly makes sense. Cover, a New York based restaurant payment app that allows you to pay without requesting the bill, has sold to Velocity, a UK based competitor---especially notable because it is reversing the transatlantic deal flow! Velocity plans to keep the Cover brand alive and retain its employees, but stated that the acquisition allows it to double the restaurants it serves and provides access to expanded suite of CRM and loyalty tech.
Cover’s mobile payments service, which allows diners to pay automatically (no waiting for the check), is now in 350 restaurants in four cities. Teaming up with Velocity means Cover doesn’t have to raise money to build features that Velocity has already built, including the loyalty program. “Instead of raising as much money as we could at the highest valuation, we are actually able to put ourselves in a position to succeed,” Egerman says. “More startups should seriously consider whether this makes sense for them.”