VC and Branding Firm Breakaway Leads Oath Craft Pizza Series A
There’s no shortage of venture capital in the restaurant industry, but there aren’t many VC-backed restaurants.
As seen in an infographic from CB Insights, a venture capital-focused market intelligence firm, most of the $1.6 billion of venture capital goes toward technology or brand-savvy retail food. It’s no surprise; restaurants are hard work and the payoff compared to the next tech unicorn or Chobani is a paltry sum.
But when John Burns, president of Breakaway Ventures, met Doug Ferriman he said there was a clear opportunity, and they created Oath Craft Pizza and entered an ever-growing pizza category together.
“We are very hesitant to make traditional early-stage investments in rather speculative situations where we can’t really affect the outcome very materially. In this particular instance, when the founder first approached me with a pizza crust he developed and talked to me a little about the technology that is becoming available to cook these days, we sort of put our heads together and said there’s an opportunity here, but rather than approach it as traditional investors, we became partners right from the beginning,” said Burns. “We actually co-founded the company with the founders and put up some of the original money—really helped start this thing from the beginning.”
Burns served as the original CEO until Rick Wolf, the current president and CEO, moved into the position.
So far, Oath has four locations in Massachusetts, ranging from a few hundred square feet with the largest standing at about 1,400 square feet.
“The vast majority of innovative restaurants in fast-causal are looking at 2,500 to 3,000 square feet; we’re trying to do something very different,” said Burns. “We think we can give you great food and a great experience in unexpected places, I think that’s a really important part of the Oath story.”
Like other fast-casual pizza concepts, Oath pizzas cook in less than 90 seconds but Burns said that’s just a ticket to the dance and the concept is differentiated in other ways.
“What makes us different is we’ve got a very unique crust, we can do it now at scale,” said Burns. “We’ve invested in a commissary so candidly we can scale nationally.”
He said while customers can still customize their pizzas, they can also avoid the sometimes overwhelming “paradox of choice” with the chef-created pizza options.
“We’re continually pushing the envelope on ingredient sourcing and trying to come up with really, really unique flavor combinations,” said Burns. “It’s nice to know you can customize everything, but it’s nice to know as a consumer in our restaurant a chef can tell you what goes well together and it might be something you never thought would go together.”
The very small boxes in high-traffic areas like inside Boston’s South Station where Oath replaced an information desk are driving great efficiencies. Burns said Oath's high-efficiency and technology-driven kitchens allow for very low labor requirements. He said during a rush, it takes five employees instead of the 10 or more necessary in a wood-burning fast-casual pizza concept. The conveyor-belt ovens, made by Wisconsin-based Hatco, also require no hood, allowing for unique locations and strong economics.
“I can tell you our sales per square foot are best in class not just in fast-casual and restaurants, but I’d say in retail,” said Burns. “So we’ve got very, very compelling sales per square foot.”
With a $4.5 million Series A made up of a more than $2 million from the co-founding VC and marketing firm and the rest from a number of co-investors, Oath is set to expand.
Burns said all the funding will be used to build new restaurants. The company will add units in Boston and is pretty far along on a “handful of locations” in New York City. The company is also working on its Washington, D.C., expansion.
Co-investors in the Series A included Joe O’Donnell, chairman of the board of directors for Centerplate, Stephen Karp, chairman and CEO of New England Development, Douglass Karp, president of New England Development, Steven Fischman, vice chairman of New England Development and Ben Fischman, founder of Rue La La and M Gemi.
Len Schlesinger also joined the company’s board. Schlesinger is the former president of Babson College, vice chairman and COO of Limited Brands and EVP and COO of Au Bon Pain. He is currently a Baker Foundation professor at the Harvard Business School.