Fast-casual pizza chain MOD Pizza says it has closed a funding round of more than $40 million as it seeks to expand well beyond its Northwestern base and become a national brand.
Fast-casual pizza chain MOD Pizza says it has raised more than $40 million in new funding to help it stretch from sea to shining sea.
The latest cash infusion brings the total amount of investment capital raised by Bellevue-based MOD to more than $70 million.
That comes in handy for a young firm that’s pursuing national brand status in a sector that’s quickly getting crowded with equally ambitious, fast-casual pizza parlors. Rivals include Pie Five Pizza Company, PizzaRev and Blaze Fast-Fire’d Pizza.
The lead investor was PWP Growth Equity, a private equity fund run by Perella Weinberg Partners.
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The move underscores the growing allure of the fast-casual restaurant sector, which fits between fast-food joints and more formal dining options in terms of price, service and ingredient quality. The niche is best exemplified by Denver-based Chipotle Mexican Grill, which in the 1990s attracted a major investment from McDonald’s and later went its own way.
Now, as health-conscious and more sophisticated Americans increasingly move from traditional fast-food restaurants, Chipotle and its brethren are prospering, thanks to better ingredients and more elaborate concoctions.
Chipotle has grown to one-fifth the market capitalization of its former mentor, McDonald’s.
One of the fastest-growing segments in fast-casual food has been the pizza parlor. Even Chipotle has launched its own version, dubbed Pizzeria Locale.
MOD, which stands for made-on-demand, was started in 2008 by Scott and Ally Svenson. It’s known for the outlets’ starkly simple look as well as its personal-size pizzas, which are topped with fresh, high-quality ingredients and quickly baked in a high-speed oven.
MOD has 32 stores in Washington, Oregon, California, Colorado, Arizona and Texas.
It plans to double that number by the end of June and reach the 100th store mark by the end of the year as it signs franchisees.
Stores are expected to pop up in Illinois, Missouri, Michigan, Pennsylvania, Maryland, North Carolina, South Carolina and Washington, D.C.
The company says it’s not looking to build out through a traditional franchising system with myriad partners, but rather with a small team of well-heeled, experienced restaurateurs.
According to franchising documents MOD filed last year, average sales at one sample location averaged $95,952 per four-week period and food costs amounted to about 32 percent of revenue.
The Svensons have a track record in big food retail: In the 1990s, they created a coffee chain in the U.K. that was later bought by Starbucks. After the acquisition, Scott Svenson served as Starbucks Europe president. They have recruited executives from Qdoba, Starbucks and McDonald’s.