Cape Town-based venture capital firm Knife Capital has sold its restaurant technology HBD portfolio company orderTalk to Uber Eats, the food delivery business of the Silicon Valley ride-services company.
The transaction enables Uber Eats to streamline workflows by directly integrating with leading point of sale (POS) systems and triggers a significant venture capital exit for Knife Capital and HBD Venture Capital in South Africa.
The terms of the deal were not disclosed.
orderTalk has shown consistent and phenomenal growth over the past 10 years, recording a 60x increase in revenue since the VC investment, and growing from 5 employees to 27. orderTalk also repaid the initial VC investment via dividends back to HBD, even before the Uber exit.
The startup was founded by Hilton Keats in 1998 on the back of an online ordering software development partnership with a US restaurant chain.
In 2004 lawyer Patrick Eldon joined as CEO and opened the Cape Town head office in 2005. After initial angel investor backing, HBD Venture Capital – owned by internet billionaire Mark Shuttleworth and subsequently managed by Knife Capital invested R9 million ($700,000) in 2008 to scale the business internationally.
While orderTalk initially expanded its technical capabilities in Cape Town, the main client base started growing aggressively in the US and UK. Over the years the core business was relocated to Dallas, Texas.
“Raising capital by way of the investment made by HBD provided enormous value, not only in tangible but also intangible terms. The strategic support, mentoring, advice and hands-on assistance received from HBD and Knife Capital over the years of the investment have been invaluable,” says Patrick Eldon, CEO of orderTalk.
“We’re excited to leverage our point-of-sale expertise to make Uber Eats an even better partner for restaurants by helping them easily integrate online orders and grow their business.”
The startup is the original provider of online ordering systems for restaurants worldwide offering expedient, dependable and secure online ordering software solutions. Since 1998, the company has utilised proprietary remote ordering software as well as mobile and social media applications to meet the expanding needs of the restaurant industry. This process is seamlessly enabled via proprietary software that is fully integrated with leading POS systems.
Knife Capital also achieved exits to General Electric and Visa from the same HBD Fund. The VC Firm is now backed by the Draper Gain Family Office and it continues to actively invest via a consortium of funding partnerships, including SARS section 12J Venture Capital Company KNF Ventures.
“orderTalk was the final investee company to exit from the R150 million HBD Venture Capital Fund that Knife Capital managed. We have proved that locally developed technologies can have global impact and that one can attain superior venture capital investment returns from South Africa,” said Keet van Zyl, partner at Knife Capital Investment.
“orderTalk set the bar on how to build investor-investee relationships. While it was not always an easy growth path, we all learned a lot, had amazing experiences, impacted lives, made money and formed lasting friendships!”
The deal will enable Uber Eats to grow its more 100,000 restaurants’ partnerships in 200 cities and 35 countries through orderTalk’s POS integration on a large scale.
orderTalk integrates with more than 10 of the leading POS providers and most major payment processing vendors.
“With orderTalk’s engineering talent and the group of people that we’re acquiring, we’ll be able to supercharge our own point of sale integration strategy,” Uber Eats head of business development, Liz Meyerdirk, says.
She explained that the acquisition was part of a two-fold strategy: to reduce the amount of errors which can arise with manually entering orders, and to streamline workflow, so that orders are directly fed to the kitchen display monitor or ticketing system.