Cava Group could be gearing up for growth. The company, which hasn’t made many announcements since acquiring Zoës Kitchen for $300 million in November 2018, recently closed a $40 million funding round, according to a December 10 securities filing. It did not disclose the investors.
Cava has now raised a total of $459.22 million, per Pitchbox, a company that lists the Mediterranean conglomerate’s valuation at $578.67 million.
Cava raised $2.3 million in November 2010 as a startup. It added another $3.1 million in a second seed round about three years later. This latest funding was Cava’s eighth investment stage.
Cava did not provide any details in the filing regarding what the capital would be used for. It did, however, reveal its directors.
In addition to chief executive officer Brett Schulman, who oversees both brands (former Zoës CEO Kevin Miles, now with Mendocino Farms, left when last year’s deal closed), Cava listed co-founder Theodore Xenohristos; Panera Bread founder Ron Shaich,; Revolution Growth (a previous fund contributor out of D.C.) partner Todd Klein; SWaN & Legend Venture Partners (also a past contributor) managing director David Strasser; The Invus Group (same as the past two) managing director Benjamin Felt; and Philippe Amouyal of The Invus Group.
Interestingly, the board also includes two other executives with Panera ties. One is Keith Pascal, formerly a senior concept adviser at Panera. He helped Shaich launch Act III Holdings, the investment vehicle that orchestrated the Zoës deal and helped finance it. It has also taken ownership stakes in a number of Boston restaurants with the goal of developing them into national fast-casual chains. Last October, this included Tatte Bakery and Café, Clover, and Life Alive Organic Café.
The other Cava Group director is William Moreton, the executive vice chairman of Panera. Moreton was co-CEO of the bakery giant before transitioning to a chairman role in 2013, a move that put Shaich into the sole executive spot again. Shaich served as CEO from May 1994–May 2010 and then co-CEO from January 1988–May 1994 and March 2012–April 2013.
In November 2017, Shaich said he was stepping down that January to focus on personal investments. He remained chairman and continued to hold a significant stake in Panera. That came after Panera entered into a definitive agreement to acquire Au Bon Pain, bringing together two iconic café chains with shared histories (he founded the brand with his late partner, Louis Kane, in 1981. Au Bon Pain went public in 1991 and the company acquired Saint Louis Bread Company in 1993. St. Louis Bread was renamed Panera. Au Bon Pain was sold six years later, and the rest is history).
Shaich’s decision to step away from the day-to-day also followed Panera’s April 2017 sale to JAB Holding Company, the parent of Krispy Kreme and Caribou Coffee, among others, for $7.5 billion.
Schulman told QSR after the Zoës deal that he met Shaich six years prior when Cava had just two restaurants. He was a small investor in Cava for a few years. Once he left his role as CEO, Shaich became more actively involved and is now chairman of the board. “I think our whole team is excited to have more of Ron’s time to spend on the business and helping to support us as we embark on this combination, and really making Cava a national brand across the country.”
Cava absorbed Texas-based Zoës’ 6,000 or so employees and 268 units with the deal. It also took the fast casual private.
So far, Cava has been the growth engine of late, with locations in New Jersey and Dallas opening this year. Nashville, Tennessee, is on deck for 2020.
When Cava closed on the acquisition, it said Washington, D.C. would serve as the headquarters for the combined company, although Cava would maintain a meaningful presence in Plano, Texas—home to Zoës. Cava added that the Zoës brand would remain intact for the “foreseeable future.”
Schulman added: “With this acquisition, Cava will be able to broaden our geographic footprint and meet the needs of even more guests—whether in Bethesda or Birmingham, Plano or Pasadena—who crave delicious, healthy food without compromise.
Together, Cava said the duo formed the first omni-channel platform in the fast-casual space that leverage two unique service models and their rapidly growing digital and app-based sales channels, a line of chef-crafted dips and spreads found in more than 250 Whole Foods Markets, and relationships with delivery service providers. It also positioned the Cava brand as a leading authority in the booming Mediterranean segment with a workforce of more than 8,000 employees across 24 states.
There are currently more than 70 Cava locations across 10 states. Founded in 1995, Zoës struggled to generate sales leading up to the sale. The brand’s previous period reported same-store sales declines of 2.3 percent, driven by a 4.4 percent decrease in transactions and product mix, year-over-year. The brand said at the time it planned to slow unit growth in 2019 and close some underperforming and older restaurants.