The pandemic has increased the adoption of digital technologies for a number of industries. But this adoption isn’t necessarily symmetric for all industries, especially mom and pop independent pizzerias that have traditionally shied away from technology. Slice empowers these businesses by enabling them to harness the power of technology at a time when these restaurants need it the most. At its core, the company features an end-to-end ordering and marketing platform that helps local pizzerias build their digital and online presence in order to address the preferences of today’s digital consumers. The company also offers “Slice Register” (a proprietary POS system), a networked rewards/loyalty platform for pizza lovers, and an acceleration program that invests directly into technology for its partners. Supporting pizzerias on the front end is the consumer app that allows users to order directly from and support over 15,000 pizzerias. Slice charges a nominal, flat per-order fee, saving these pizzerias from the onerous, hefty commissions charged by third-party apps that are percentage-based. By its estimate, the company has already saved its partners over $250M in fees.
AlleyWatch caught up with CEO and Founder Ilir Sela to learn more about the immense impact Slice has on not only pizzerias but also local economies, the value that selecting the right investors has had on the company’s trajectory, latest round of funding, which brings the total funding raised to $125M, and much, much more.
Who were your investors and how much did you raise?
It was our Series D round and we raised $40M.
Cross Creek led our Series D round with additional funding from former Twitter CEO and COO, Dick Costolo and Adam Bain of 01 Advisors, GGV Capital, KKR, and Primary Venture Partners.
Tell us about the product or service that Slice offers.
Slice is building the technology to put the tools, data insights and back of house support that Domino’s franchisees receive, directly into the hands of independent pizzeria owners.
Slice is doubling-down on its investment into Slice Accelerate– an ongoing program inspired by the added stress offline small businesses were experiencing as a result of COVID-19, with plans to invest $15,000 in technology and services into hundreds of nominated shops.
This funding round will allow the company to accelerate growth of its already massive network and customer base by broadening its product roadmap and continuing to invest in vertical solutions for its partner shops.
What inspired the start of Slice?
I started Slice to solve the digital challenges of my family’s New York City pizzerias. I come from three generations of pizzeria owners.
Today, we partner with nearly 15,000 pizzerias across 3,000 cities in all 50 states forming the nation’s largest marketplace for authentic pizza, almost triple the U.S. footprint of Domino’s. I’ll add that Slice’s fixed-cost per order (which is $2.25) model has saved the local shops in its network over $250M compared to predatory third-party delivery apps.
How is Slice different?
Slice is the nation’s largest network of independent pizzerias.
By offering the same specialized technology, marketing, data insights, shared services, and guidance that pizza franchises offer franchisees, Slice transforms independent pizzerias to serve today’s digital-minded customers. We charge an industry low, fixed-cost per order to the shop only — it’s a model designed to benefit both the business owner and consumer alike.
We believe that enabling small businesses to thrive with support similar to a franchise ultimately makes a better experience for customers to order from their go-to shops and discover their next favorite.
What market does Slice target and how big is it?
Small businesses are the lifeblood of America’s economy. Small and midsize businesses make up the backbone of our economy. They employ roughly half the workforce and generate about half of our GDP.
For every dollar spent at a local independent business, 58 cents stays in the community. For every dollar spent at a large chain, it’s just 33 cents.
Small businesses create diversity and competition in the market, which is good for consumers and helps spur innovation.
⅔ of the US pizza market is local pizza…. Local pizza restaurants exist in every town in America. They’re a huge population, but are fragmented and therefore underserved when it comes to technology.
That’s where we are different. We are vertically integrated, we digitize their operations. We aim to help them make more money, and save more time so they can focus on what they do best as makers and creators.
These local shops need our first-party support, not third-party.
What’s your business model?
Slice’s approach is different. We equip independent pizzerias with the specialized technology, marketing, data insights, and shared services they need, particularly right now when small businesses without a digital solution are struggling.
We do this all at a low fixed cost per order so that as order size increases, the benefits go back into the pockets of the business owner. Our mission — keep local thriving — drives everything. We have the proof to show our model is working to benefit local shops and consumers alike.
How has COVID-19 impacted the business?
It’s accelerated the transformation of pizzerias to go digital — it’s a necessity that luckily, Slice could solve.
Slice’s mission is to help local owners bring their businesses online and embrace the rapid evolution of how consumers find and order food, which is more important than ever given the sustained surge in demand for pickup and delivery.
Pizza vs Pandemic has been a huge success, and easily demonstrates how we’ve been able to provide the tech and services that allow small businesses to not just survive, but thrive.
The continued success of our small business partners and the Pizza vs. Pandemic program underscores the long-term strength of Slice’s business model.
Pizza lovers not only enjoy easy online ordering from their go-to local pizzerias, but also better menu prices and exclusive specials.
What was the funding process like?
We closed our Series D round in 6 days.
What are the biggest challenges that you faced while raising capital?
In order to fuel growth, we raised our first round of funding in late 2015. It was led by the founding team of Seamless, which now is known as GrubHub. Fast-forward to today, we’ve raised $125M. The first round was pretty simple. We had a lot of traction. Our numbers looked great. We were profitable and growing quickly. Then when you get an influx of capital, I think, in hindsight, we kind of got away from what made us special, what made us great. We lacked some discipline, and we started spending money in ways that, prior to that, I would have never imagined spending money. The reality is that when investors commit capital and trust in a founder, entrepreneur, the goal is to turn that capital into value. We didn’t do that very well in the first couple of years. So the second round and the third round were a little bit more challenging. But everything for me is a lesson. In some cases, I took lower valuations to partner with the right investors, and they have stood by me and stood by the business during some of those challenging times. Fast-forward to today, everything clicks, and we’re now back in hyper-growth mode and working with an incredible team and group of investors.
Some advice I’d offer — don’t ever just simply optimize for valuation for price because this is a long journey. It’s a marathon. What’s really important is to have a relationship with an investor, where their terms are very clean, the term sheet is super company-friendly. Then the partner has a long-term view and appreciation for the business. So, for me, it was, do they believe and share in my vision, or where we’re headed, or are they asking me to make changes, and am I turning a blind eye to that simply because I know that I need capital. I think a lot of people make that sacrifice because they need the capital. They partner with an investor who doesn’t share the vision, and they actually want some changes. I think that’s challenging and presents a lot of challenges down the road. So, do they share your vision? Are they somebody that you would hire and vice versa? And will they be there during the difficult times?
Some advice I’d offer — don’t ever just simply optimize for valuation for price because this is a long journey. It’s a marathon. What’s really important is to have a relationship with an investor, where their terms are very clean, the term sheet is super company-friendly. Then the partner has a long-term view and appreciation for the business. So, for me, it was, do they believe and share in my vision, or where we’re headed, or are they asking me to make changes, and am I turning a blind eye to that simply because I know that I need capital. I think a lot of people make that sacrifice because they need the capital. They partner with an investor who doesn’t share the vision, and they actually want some changes. I think that’s challenging and presents a lot of challenges down the road. So, do they share your vision? Are they somebody that you would hire and vice versa? And will they be there during the difficult times?
What factors about your business led your investors to write the check?
Slice has an impressive track record for investing in the success of SMBs which has been proved over time. This year, the company announced that it’s on track to surpass 1B in GMV this year and double its cumulative sales.
What are the milestones you plan to achieve in the next six months?
While we weren’t actively fundraising, this was predominantly an insider-led round and an opportunity to bring in Twitter’s former CEO and COO, Adam Bain and Dick Costolo as investors and advisors. Funding will allow the company to accelerate growth of its already massive network and customer base by broadening its product roadmap and continuing to invest in vertical solutions for its partner shops.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
I was bootstrapped for 6 years (2010-2016). I’d say (for me this is a must), surround yourself with people who are smarter than you, that align with your vision, and do that as early as possible because the earlier that you can do that, the more likely it is that you will succeed as a business owner and as a founder. I wish I had known that sooner. I would say the one that really is a much bigger opportunity in hindsight is to think incredibly big and relative to those big dreams, become a great storyteller. Have the ability to inspire people with your dreams and tell your story and tell people why because through that storytelling, through those words and emotions and dreams, then people can follow you. And when they follow you, you can recruit great talent, you can sell to the really stubborn small businesses, and really, anything is possible. I believe storytelling is the only superpower that people have, so I wish I had worked on that craft earlier. But, again, in hindsight, I would tell this to anyone who is either in school, even my daughter, I’d say: be a great storyteller. The money will follow.
