Food software startup Olo, named after the phrase “online ordering,” might have plans to file an initial public offering (IPO) in 2020, according to a report from Bloomberg.
The company, which is based in New York, is looking for a $1 billion valuation. Olo has been interviewing possible advisers since the end of last year.
Olo gives restaurants the ability to organize orders and create customized menus, and helps companies create and maintain loyalty programs.
In 2019, Olo and Uber teamed up to let customers put Uber Eats orders directly into a restaurant’s system. Olo also has partnerships with Five Guys, The Cheesecake Factory and California Pizza Kitchen.
The IPO market has seen several recent moves by food delivery companies. For example, Postmates said it was filing to go public early last year, and Uber Eats was a key part of Uber’s public listing in terms of future growth. Another delivery company, DoorDash, has reportedly been looking to do a direct listing, which would bypass the IPO process.
Olo was originally started as a text message food ordering service in 2005. The company got a real boost when The Raine Group invested $40 million in 2016, and again when Tiger Global Management invested $18 million in 2019. Olo also recently announced it was working with Google to allow people to get food directly from online searches.
Noah Glass recently spoke with PYMNTS’ Karen Webster about the industry as a whole, and touched on the trend of “ghost kitchens,” where third-party operators prepare food and hand it off right to drivers. According to Glass, that’s what is happening all over the U.K. and is starting to happen in the U.S., care of Uber Eats, prompting aggregators to open their own ghost kitchens and compete directly with restaurants.
“That is the direct-to-consumer experience that can truly be the restaurant killer – it is the restaurant equivalent of the Amazon Basic brand that gets top billing on the platform, can be priced more competitively and can be targeted to what they know consumers are already buying the most of,” Glass said.
The two also spoke about how restaurants are potentially in danger from delivery services. “It’s time for restaurants to get up to speed very quickly on building a credible, competitive and ultimately better offering to draw consumers back into working directly through them, or risk permanently losing those relationships,” Glass told Webster.