Sam Nazarian, the hospitality mogul who in recent years has entered the business of virtual restaurant brands, is acquiring Nextbite, the struggling owner of a group of delivery-only restaurant concepts.
The deal marks an expansion of Nazarian’s growing virtual brand collection, which already includes about 45 concepts under the C3 umbrella, and the end of an era for Nextbite, a startup that foundered over the past year after raising $150 million in venture capital.
Nazarian also owns SBE, a group of nightclubs and restaurants.
He will turn Nextbite into a new company called Nextbite by SBE, which he will own and run alongside some of Nextbite’s current executives. As part of the deal, Denver-based Nextbite will relocate to Nazarian's home turf of Miami. Financial terms were not disclosed.
“Nextbite by SBE will be the leader of the digital-only space—a global platform inspired to reimagine dining and push the boundaries of the culinary space,” Nazarian said in a statement.
The acquisition includes all of Nextbite’s more than 20 virtual brands and its more than 1,100 restaurant clients. Nextbite worked with restaurants of all sizes, from mom-and-pops to IHOP.
“We will further establish those brands that Nextbite has built and support them in their next exciting chapter while reinforcing the amazing pipeline we have created,” Nazarian said.
Nextbite was co-founded in 2019 by Alex Canter, a member of the family that owns LA’s iconic Canter’s Deli. It developed restaurant brands like HotBox by Wiz, Crave Burger and Grilled Cheese Society that restaurants could license and serve for to-go only.
As delivery took off early in the pandemic, so did Nextbite. Its growth was fueled further by a $120 million investment in October 2020 led by big tech investor SoftBank Vision Fund.
But it ran into trouble last year as the economy slowed and fresh capital dried up. It has gone through at least three rounds of layoffs since last spring, including a significant reduction last month.
Earlier this week, Nextbite announced it was selling Ordermark, a part of its business that helps restaurants manage online orders. The buyer was Indian restaurant tech company UrbanPiper.
"We built the Nextbite business and our brand portfolio over several years to include many popular consumer favorites," Canter said in a statement. "We've gotten to know Sam Nazarian and his team very well, and simply put, there's no other organization in the virtual restaurant space that's better qualified to take these brands to the next level in a big way."
C3, like Nextbite, expanded rapidly during the pandemic, amassing a collection of digitally focused, limited-service brands including Umami Burger and Krispy Rice. As of last spring, C3 concepts were in more than 1,000 locations, including brick-and-mortar stores, food halls, ghost kitchens and hotels. They’re available on delivery apps as well as C3’s own Go By Citizens app.
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