Staten Island, New York is not known for tech startups. Luckily for Ilir Sela, it is known for its pizza.
Domino’s is crushing it online so a startup got $15 million to help pizzerias fight back
GGV Capital is leading the round into New York City-based Slice.
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
The Staten Island resident got his start by building websites for local pizza shops owned by some friends and family. After years of bootstrapping, he recently raised $15 million for his startup Slice, which aims to help pizzerias convert from phone orders to digital orders, and battle back against the digital dominance of Domino’s along the way.
The round is being led by GGV Capital, the investment firm that has taken stakes in fast-growing app-based marketplaces like Wish, OfferUp and Poshmark. Slice had previously raised a small A-round investment from Primary Venture Partners.
“In order for independent pizzerias to thrive, they have to adapt to digital,” Sela said in an interview. “You have to allow your customers to order online.”
Slice operates both a website and an app that lets people search for pizzerias in their area — over 6,000 nationwide — and place an order online. The pizzerias handle deliveries themselves and pay a flat fee of $1.95 per order to Slice, no matter the size, whereas many other online ordering services charge a percentage of the sale. With Slice, customers don’t pay anything extra, unless their local pizza shop charges a delivery fee.
A common response — which I had — is to assume that sites like GrubHub and its subsidiary Seamless already do a good job in this category.
But one piece of the argument Sela makes, which I sort of buy, is that when someone is either in the mood for pizza or wants the convenience of it for a big group, they’re specifically looking for pizza. So a standalone ordering app for that category of food can work. Pizza sales were expected to reach $45 billion in the U.S. alone last year.
There are other differences. Part of the appeal of websites like GrubHub is that they allow customers to choose across a range of different cuisines, which leads to discovering new restaurants.
But Slice’s main pitch to pizzerias is around increasing loyalty among current customers, not necessarily attracting new ones. We will make it easier for your current customers to order from you, the pitch goes, so they will order more frequently and also spend more per order. Many pizzerias Slice works with also are based in parts of the country where popular online-ordering websites haven’t yet reached.
The challenge of any marketplace is building both the supply and demand sides. So Slice leans on its pizzeria partners to spread the word to their customers.
But the startup also just hired industry veteran Ryan Scott as its chief marketing officer. He most recently was with Soul Cycle, but his prior experience is more relevant: He was chief marketing officer of Seamless, and later VP of marketing of GrubHub.
“With my network,” he said, “I have the ability to bring in people who’ve done this before.”
This article originally appeared on Recode.net.
