Chris Meaux and the app-based food delivery platform he co-founded are a $308 million Louisiana technology success story. (Photo by Terri Fensel)
After pulling off a record $2.2 billion purchase of the Houston Rockets in October 2017, Texas billionaire Tilman Fertitta was on the hunt for his next big deal in 2018.
The hospitality industry magnate and star of CNBC’s Billion Dollar Buyer had formed a special purpose acquisition company, or SPAC, two years earlier called Landcadia Holdings Inc. SPACs, known as blank-check companies, raise money through an IPO to acquire an unspecified target company, typically within two years.
With the clock ticking, Fertitta had until mid-2018 to make a deal or return the money to investors. What he was after was a high-growth company that would complement his own businesses, which include the Landry’s restaurant empire as well as the Golden Nugget Casinos. One month before the deadline, Fertitta’s team zeroed in on a tech startup.
It was Waitr, the app-based food delivery platform based in—of all places—Lake Charles. The fact the company comes from a city known more for LNG than technology made it all the more intriguing.
The Louisiana startup had a strategy unique from its competitors: staking out market share by dominating smaller cities that bigger players wouldn’t touch. It was a clever play that paid off generously for Waitr, which saw explosive growth in just four years, creating a stunning success story for a tech underdog like Louisiana.
Many of Fertitta’s restaurants were already Waitr customers when they heard the company was looking for capital to expand in 2018. One of Landry’s executives who works with Waitr urged Fertitta’s team to look into it as an opportunity for the SPAC, so they began researching the local food-delivery industry.
“Waitr was the best in class,” says Steve Scheinthal, Landry’s executive vice president. “They were a leader in their markets.”
Scheinthal called Waitr CEO Chris Meaux in April to set up a meeting. Within days, his team hopped into Fertitta’s helicopter, flew from Houston to the Golden Nugget Casino in Lake Charles and showed up at Waitr’s doorstep to hear Meaux and his team pitch their company.
Fertitta’s reps liked what they heard and threw out a potential buyout offer. But Meaux didn’t bite, saying it was too low. Scheinthal then asked everyone to leave the room except Meaux, and the two businessmen negotiated one-on-one as Meaux went over the numbers, explaining why Waitr was worth more.
Scheinthal raised the offer: $308 million. Meaux stepped out to consult his team, walked back in and shook Scheinthal’s hand
“We have a deal,” Meaux said.
Three weeks later the agreement was on paper, and the news broke on May 16. Meaux and his team will still run the company, with Fertitta and Scheinthal joining them on the board of directors. Waitr will receive $50 million in cash and $258 million in stock in a deal that will take the company public later this year.
And the headquarters? Still in Louisiana.
Today Meaux thinks back to when he and his co-founders—four young college grads—started Waitr, and how, in his early attempts to raise money, venture capitalists told Meaux he’d have to move the company to Austin or Silicon Valley.
“I was like, ‘You know, I’m going to stay and raise this money in Louisiana. And I’m gonna show everybody,” Meaux remembers thinking. “‘I’m going to get the biggest names in Louisiana to invest in my company.’”
Two years after the launch, his words materialized. By then Waitr had expanded to 16 markets across the South and was seeing 15% to 20% month-over-month growth in sales, when the company landed its first big fish: Drew Brees.
An investment group led by the New Orleans Saints quarterback dropped a $10 million capital infusion into Waitr. With that, Waitr scored one of the—if not the—biggest names in Louisiana. But not even Meaux could have predicted what was to come next, because how do you top a name like Brees in Louisiana?
With a name like Fertitta in Texas.
“Someone asked me the other day, ‘So when you started the company, did you think you and four college students could convince a Super Bowl MVP and the Billion Dollar Buyer to be involved in your company?’” Meaux says, a smile sweeping across his face.
“I said, ‘Well, when you put it that way, hell no—I never expected that.’”
Someone asked me the other day, ‘So when you started the company, did you think you and four college students could convince a Super Bowl MVP and the Billion Dollar Buyer to be involved in your company?’ I said, ‘Well, when you put it that way, hell no—I never expected that.’
CHRIS MEAUX, reflecting on Waitr’s four-year journey
(Photo by Terri Fensel)
‘WHAT’S FOR DINNER?’
Weeks after the Waitr buyout had been announced, Meaux and his team still marvel at how it all happened, not just the acquisition, but the entire wildly successful ride that led them there, beginning four short years ago.
Swapping stories around a table in their Lafayette office on a Friday morning in June, Meaux and two of his co-founders—Addison Killebrew and Evan Diaz de Arce—reminisce more like friends than business partners, despite the generational gap between them. Meaux, at 50 years old, has a good 20 years on the other founders.
They talk about the weekend they met in 2013 at a startup event in Florida and laugh as they recall how Meaux eventually convinced them to move to Lake Charles. The three share what it was like to build Waitr from the ground up, recalling both the early failures and small victories, like the first restaurant they signed up or the first time someone they didn’t know placed an order—accomplishments that now seem so minor compared to where they are today.
Meaux breaks out a relic of the not-so-distant past: A composition notebook, revealing how he developed the Waitr concept in 2013, with early sketches of the app—called pseudocode—and the original name Meaux gave it: Foogle. Food plus Google.
“This is no joke. I was going to originally call it Foogle,” he says, adding that he may have gotten sued.
Toward the beginning of his notes, there’s a page dated October 12, 2013, where Meaux wrote just one sentence: “What’s for dinner?”
It was the question Meaux and his wife asked every day, as many parents can probably relate. With two kids who were involved in sports at that time, life was busy and they often didn’t have the time or the energy to cook or go out to eat.
“I’d ask my wife what she wanted for dinner, and she’d just tell me healthy chicken because she’s a fitness nut,” Meaux says. “And I said, ‘So what, you want me to Google healthy chicken?’”
But what if you could do that, he thought. What if there was a way to simply search online for the food you want and have it delivered to your home? That’s when he started jotting down his ideas and designing an app that could do this.
It’s worth noting that Meaux, by this time, was no amateur when it came to technology. He began his career when Hyundai Electronics recruited him from LSU in the late 1980s to work in Dallas and then in Silicon Valley. Later he joined computer software company MacAfee and worked in Europe as well.
In the late 1990s, he launched his own internet startup in Dallas. Meaux raised a lot of money and had some early success, he says, but then the internet bubble burst and the bottom fell out in the early 2000s. His company failed as a result and, for a while, Meaux swore off technology.
He pivoted to food instead and tried out a few restaurant concepts in Dallas, including a delivery-based venture called Meaux’s 2 Geaux in 2009. He leased out a demo kitchen for a few months, where he and a chef cooked and delivered meals that customers ordered online. It also was successful, until his lease was up and he couldn’t find another space.
But Meaux knew the concept was too good to let go, so he tweaked it. He thought, why does he need a kitchen? Chefs are already doing the cooking at restaurants. That’s when Meaux decided to go in the restaurant delivery direction.
Once he had the concept mapped out, Meaux headed to an event called Startup Weekend, which takes place throughout the year in locations all around the country. The one Meaux attended in late 2013 happened to be in Gainesville, where he would meet Killebrew and Diaz de Arce, then students at the University of Florida.
FOOGLE TO WAITR
Before Meaux could pitch his Foogle idea, however, another guy got up and pitched an app for ordering at restaurants, essentially replacing waiters. His name is Aleksander Levental, who also founded a startup called Feathr, so when asked, he dubbed the app Waitr.
The idea was similar enough to Meaux’s pitch so he joined Levental’s team, along with Killebrew and Diaz de Arce. They built a prototype and won the pitch competition. But with Feathr, Levental couldn’t invest the time in starting a new company, so Meaux said he would take the lead, go back to Louisiana and raise the money to start Waitr. Killebrew and Diaz de Arce agreed to stay on with him, although both were still in college.
Meaux incorporated the company in December 2013 and started fundraising, while his partners in Florida were finishing school. They stayed in touch, and when most students were on break, traveling to the beach or abroad, they were visiting Meaux to work on Waitr.
“Yeah, we spent our college spring break going to Lake Charles,” Killebrew laughs.
Meanwhile, Meaux sent out emails to LSU, McNeese and UL Lafayette professors looking for software engineers to join the company. From that, two more students were added to his team as co-founders, both from McNeese: Adam Murnane and Manuel Rivero.
The five of them spent most of 2014 building up Waitr and its software. It took some trial and error, along with some impressive salesmanship to get customers and, perhaps most importantly, restaurants on board.
“Tell the story about the demo,” Meaux urges Killebrew and Diaz de Arce in the Lafayette office in June.
The pair from Florida spent most of the early days pitching Waitr to restaurants in Lake Charles. They had a demo of the software on an iPad to show the owners how it worked. Problem was, the demo wasn’t all that reliable so they had to get creative.
“We’d go into the restaurant, ask for the owner and then start walking them through our demo,” says Diaz de Arce. “About half the time it would crash on us, so we had this kind of sleight of hand. I would be pitching the demo, and as it started to crash, I’d turn it my way and Addison would step in and start talking.”
Fake it till you make it, right?
Waitr debuted in the App Store in January 2015. Lake Charles was its only market then, and for a while only friends and family were using the service. Within one or two weeks, they hit their first milestone.
“I remember the day we got an order from the first person we didn’t know,” Meaux says.
At that time, Meaux and his four co-founders wore several hats: They were the first delivery drivers, customer support, software engineers and sales people. Meaux had the business experience, while Killebrew and Diaz de Arce handled sales, and Murnane and Rivero were the software engineers.
Soon enough, growth came at a stunningly fast pace. Waitr expanded east to Lafayette in mid-2015, followed by Baton Rouge and New Orleans a year later. In what seemed like no time at all, Waitr simultaneously built up and owned the food delivery game in south Louisiana, all the while growing its national footprint.
The focus on small to mid-sized markets was crucial to the company’s growth and mirrored Walmart’s expansion in the 1970s, Meaux says. He remembers growing up in Crowley, Louisiana, when Walmart came to his small town, where retail options were few, and changed the game. That’s what Waitr had in mind as well, as it built up its brand in smaller markets with little to no competition.
Soon, Waitr’s brand became successful enough to hold its own, even up against the big national brands like Uber Eats and GrubHub that swooped into the same markets.
“In 2016, we really started getting some traction,” says Diaz de Arce. “I felt like, ‘Oh, this is real. It’s not just five dudes—there are people’s jobs on the line.’”
Restaurants are also on the line as they continue to put their food in Waitr’s hands, while the company grows rapidly. Remember, most Louisiana restaurants never used a third-party delivery company before Waitr came about just a few years ago.
“It took some getting used to,” says Walk-On’s CEO Brandon Landry, who began working with Waitr in 2016. “We can train our staff and manage everything in house, but if a third party messes up, guess who it looks bad on? It’s the million-dollar question for restaurants: How do you protect your brand with a third party?”
Restaurants are made for dining-in, so having to prepare and package meals for delivery has been a game changer, Landry says. And restaurants can’t control if drivers make mistakes or the delivery system becomes overloaded—as happened on Valentine’s Day 2017—leaving food sitting for too long.
Still, the benefits have outweighed those concerns for restaurants. Landry says some of his locations have seen to-go sales triple thanks to Waitr. It’s also a great marketing tool, as more customers can find Walk On’s and browse its menu on the app.
There are a few reasons why Waitr has become so popular among restaurants, Landry says. First, the app is user-friendly, with photos of the food and the ease with which customers can order. Also, it’s cheaper. Waitr takes a 15% cut of every order, whereas competitors take 25% to 30%. Lastly, Waitr is a local company so Landry can sit down with executives like Meaux to talk through any issues. And he has.
In fact, Landry is to credit for connecting Meaux with Drew Brees, who is a part owner in Walk-On’s. At the Carousel Bar in New Orleans one night after the Louisiana Restaurant Association Expo, Meaux asked if Landry wouldn’t mind connecting him with the Saints quarterback. Not long after, Brees invested.
“When the Waitr buyout was announced, I texted Drew and said, ‘When do I get my commission check in the mail?’” Landry jokes.
He didn’t expect such a big buyout to come so soon, but Landry says it’s awesome news for a fellow Louisiana startup. He just hopes that Waitr can keep up with the growth while continuing to serve and represent their restaurants well.
The company has acknowledged the pitfalls of rapid expansion in the past, even doing so in a public apology after the 2017 Valentine’s Day debacle. But the Waitr team also recognizes that failure is critical to the learning process, something Meaux himself had to learn after his first entrepreneurial venture tanked in the early 2000s.
Execution is everything, Meaux says, especially for a company like Waitr. Food delivery is not a novel concept. The competition is tough and it’s not a zero-sum game. To make it work, you have to do it better.
“Entrepreneurship is about the execution of an idea, not coming up with an idea,” Meaux says.
Accelerated growth is in the future for Waitr, as the cash proceeds from the buyout will fund expansions into new markets and acquisitions, especially now that Waitr has another big name helping to build up its brand.
“From a Wall Street perspective, Fertitta helps provide credibility as a proven Wall Street veteran backing the group,” Scheinthal says. “Also, Tilman has a lot of outlets, with over 2 million multi-club members at our casinos and 9 million Facebook followers with the Houston Rockets.”
Although Meaux wasn’t necessarily looking for a buyout, it was almost as if fate itself pulled this deal together. The respective industries aligned seamlessly, and the SPAC created a unique model to take the company public. For the Waitr team, though, perhaps the best part about the deal is that they will still be involved.
“That’s the coolest thing about all this,” Killebrew says. “At the end of the day, we’re gaining a partner. We’re merging into a special acquisition unit, but we’ll continue doing what we’ve been doing—just at a faster pace.”