CAVA Group, the parent of CAVA and Zoës Kitchen, announced Tuesday that it received a nearly $200 million investment to bolster restaurant expansion, grow consumer packaged goods, and elevate digital channels.
The company's Series F funding round of $190 million was led by T. Rowe Price Group, with participation from The Invus Group, Declaration Partners, Equilibra Partners Management, SWaN & Legend Venture Partners, Mousse Partners, Revolution Growth, and Lighthouse Investment Partners. The news comes after CAVA closed a $40 million funding round in December 2019.
The new round of funding increased the company's value to almost $1.3 billion, a source told Bloomberg.
CAVA’s unit growth strategy—which started prior to COVID— is rooted in the growth of suburbs and cities in the Sunbelt. The company's $300 million purchase of Zoës Kitchen in 2018 was geared toward this goal. At the time, CAVA absorbed Texas-based Zoës’ 6,000 or so employees and 268 units with the deal. It also took the fast casual private. CAVA will use its recent multi-million investment to continue leveraging the population migration toward the Sunbelt.
This year, CAVA will convert more than 50 Zoës Kitchen restaurants into CAVA locations and enter several new markets, including 14 new stores in Atlanta. Currently, there are 113 CAVA and 176 Zoës Kitchen restaurants. Bloomberg said CAVA expects to have more than 500 stores open by 2025.
Outside the restaurant, the company plans to invest more in its packaged dips and spreads, which are sold nationwide in Whole Foods. CAVA said further investment in its distinct vertically integrated production model will allow “uncapped expansion and tandem growth of both the CPG line and the restaurant business.”
In terms of technology, CAVA will use a portion of the $190 million to invest in next generation technologies, therefore “laying the foundation for further channel diversification in the future.” The restaurant has seen a significant increase in the use of its loyalty program and digital access channels amid the pandemic.
CAVA launched its new app in December, which merges in-store and digital experiences to meet guests where they are. As CEO Brett Schulman explained, “the new ordering interface features a highly visual UX that mimics our in-store walk the line format, showing off each menu item with vibrant images, and encouraging discovery of new ingredients and Mediterranean flavors as users follow the same flow as they would in the restaurant.”