Velocity buys Cover: UK dining app startup buys US restaurant payment firm and lands $4m from Saxo’s Lars Christensen and others
Velocity, an app which lets you pay in restaurants without requesting a bill, has raised a further $4m (£2.6m) from investors, following hot on the heels from a $12m round of funding less than three months ago.
The London-based startup has also acquired US company Cover, a restaurant mobile payments app for an undisclosed sum, more than doubling the number of restaurants it works with and reversing the traditional transatlantic tech startup deal flow.
The app cuts waiters out of the billing process leaving them with more time for customer service, letting users book, pay for and earn rewards for meals at many of London's top restaurants. The expansion into the US market will help Velocity fulfill ambitious global growth plans and create a worldwide dining network, it said.
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With Cover, Velocity adds 350 US restaurants to its existing 300 partners in Europe – largely in London – including the likes of Hix, Sketch, Gymkanah and Burger and Lobster. The acquisition is a first for the less than two-year-old startup but further deals are planned.
Cover investors Spark Capital, OATV and Lerer Ventures will become shareholders in Velocity as part of the deal.
Saxo Bank chief Lars Christensen, who announced yesterday he will soon step down from the bank, was a major investor in the new $4m greenshoe funding, bringing Velocity's Series A round investment to $16m in total. Backers also include former Thomson Reuters chief executive Tom Glocer and Initial Capital partner Shukri Shammas.
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"We are delighted to have completed the acquisition of Cover, the first major step in accelerating our international roll-out” said Alex Macdonald, Velocity's co-founder and co-chief executive.
“With the acquisition, we are excited to bring our suite of loyalty, CRM, and analytics tools to restaurateurs in the US, enabling them to identify, attract, and retain high value, trend-setting customers. We see ourselves as a hospitality company first, and a technology company second – a value shared with our newly expanded U.S. team.”
The company was founded by former school friends Macdonald and Zia Yusuf, a former Goldman Sachs director who is also the startup's co-chief executive.