The pandemic has reshaped the way the restaurants look at technology in their operations but most of the attention has been on customer-focused solutions like QR codes for menus, digital ordering, and contactless customer payments. However, just as important is the restaurant’s “back of the house” operations, especially critical functions like inventory management and vendor/supplier management. Zitti is a fintech platform that is focused on providing restaurants with the tools needed to manage supplier payments, analytics, invoices, credit, and payment terms. Built by a restaurant insider, the platform is designed to provide small and medium-sized restuarants, typically family-owned establishments, with the tools and flexibility that are available to larger, more well-capitalized chains. It’s estimated that 110K restaurants closed in 2020, leading to job losses in the millions. To ensure that restaurants adopt the platform without much friction, there are no onerous monthly or recurring fees; instead, Zitti takes a small portion of every payment processed on the platform. Zitti is currently in beta with plans to launch publicly later this year.
LA TechWatch caught up with Zitti CEO and Founder Dante DiCicco to learn more about the inspiration for the business, the process of building a remote team, the company’s strategic plans, first institutional round of funding, and much, much more…
Who were your investors and how much did you raise?
Zitti raised $4M in a pre-seed round. Led by Crossbeam, Zitti’s other investors include Vera Equity, a venture firm co-led by Michael Vaughan (Venture Partner at Oak HC/FT, former COO at Venmo), and Jonathan Pomeranz (Partner, Head of FinTech Practice & Co-Head Global Financial Services at True Search), and Broadhaven Ventures, led by cofounder and partner Michael Sidgmore.
Zitti has also received investments from Snap executives and alumni and a suite of key investors across the financial, technology, and restaurant spaces. These include Donald Moore (Former Chief Culinary Officer at Cheesecake Factory), Rodney Williams (Former President & CEO of Belvedere Vodka), Michael Tannenbaum (COO of Brex / Former CRO of SoFi), Jeff Cruttenden (Cofounder of Say and Acorns), Andy Cohen (Former SVP of Sales at Bill.com) Chris Camp (V.P. of Sales at DoorDash), and more.
Tell us about your product or service.
We are changing the way the foodservice industry does business. As a first-of-its-kind payment and credit platform built by and for restaurateurs, our platform levels the playing field so independent restaurants can compete with larger chain restaurants. We do this by providing an easy-to-use back-office payments platform to empower small-to-medium-sized restaurants with streamlined invoice management, AI-powered insights, and universal payment terms with food vendors.
Our platform streamlines the payment process by converting paper invoices to digital ones and providing a dashboard that shows how much the restaurant is spending with each distributor. This data is stored securely on the cloud and is easy to access and review.
What inspired the start of Zitti?
With decades of hard work, my family built a successful restaurant business, and I watched it nearly fold during the pandemic. Antiquated processes and terrible payment terms from suppliers have been huge obstacles for small and medium-sized restaurants during the pandemic, but these problems have always been there.
We’re building Zitti to save the family restaurants we all love and finally give them some of the same competitive advantages the big chains have, plus the time and money to focus on doing what they really love: serving their customers.
How is it different?
A lot of fintech companies focus on one area of the problem or a single feature under an expensive SaaS model. Zitti is free to restaurants except for a small transaction fee and gives them the comprehensive back-office management tools to not only survive but thrive. Better yet, Zitti benefits vendors by allowing them to get paid on time, every time. We are on a mission to be the technology layer that powers and empowers the entire food supply chain.
What market you are targeting and how big is it?
We are targeting small-to-medium-sized businesses. With over 900,000 restaurants in the U.S. alone, many restaurants will benefit from Zitti throughout the nation.
What’s your business model?
Restaurants and suppliers pay nothing to take advantage of Zitti’s streamlined operation platform. Our revenue comes from receiving a percentage of each transaction processing fee.
What are your post-COVID office plans??
Given that we began scaling our hiring in early 2022, we have benefitted from the technology and resources available to companies amid the Covid environment. We have a remote-first model. However, I am “old school” and love in-person interaction. We have an office in Santa Monica, and we share space with another young L.A. company founded by other fellow Snap alums. The rest of our employees are based across NY, Chicago, Denver, and Austin, and we have made a point to prioritize some kind of regular in-person interaction. Because we are majority-remote, we place special emphasis on building and maintaining a team-oriented culture.
What was the funding process like?
As a first-time founder, I did not know what to expect going into the process. I found that being my authentic self was always a winning strategy. The fundraising process was also an opportunity to meet some incredible people, many of whom have become close advisors and mentors in addition to investors. Examples of this included getting to work with people like Stephano Kim (former Chief Strategy Officer of WarnerMedia), Michael Vaughan (former COO of Venmo), Mario Del Pero and Ellen Chen (co-founders of Mendocino Farms), and so many more. Ultimately, our pre-seed fundraising ended up being a significant success, and we were oversubscribed. However, I was open to feedback and really valued taking investor feedback during the process.
What are the biggest challenges that you faced while raising capital?
The biggest initial challenge I faced was the investor’s hesitancy to dive into the restaurant space, given all of the issues the industry faced during COVID. However, I remained convinced of the need for Zitti in the market and believe strongly in the problems we are solving. I also believe in the long-term viability of the food industry in the U.S., and this belief has been proved right over the last few months. Just months ago, investors were afraid of the restaurant industry, and now it is one of the hottest spaces, which is very exciting. Another challenge was receiving offers that I had to turn down. As a first-time founder, it is flattering and validating to receive term sheets for large checks. However, my loyalty needs to be to our employees and current shareholders, and I put a lot of weight into giving away parts of the company. I have been fortunate to be surrounded by some very smart advisors who have guided me through that aspect of the process – turning down money is never easy!
Just months ago, investors were afraid of the restaurant industry, and now it is one of the hottest spaces, which is very exciting. Another challenge was receiving offers that I had to turn down. As a first-time founder, it is flattering and validating to receive term sheets for large checks. However, my loyalty needs to be to our employees and current shareholders, and I put a lot of weight into giving away parts of the company. I have been fortunate to be surrounded by some very smart advisors who have guided me through that aspect of the process – turning down money is never easy!
What factors about your business led your investors to write the check?
The three main factors that led investors to invest in Zitti were:
- Founder/Market Fit – My background in the restaurant industry (66-year family history running independent restaurants, and I opened my first restaurant in January 2022) combined with my experience building the global business of Snap for nearly seven years provided to be a compelling combination to solve inequities in the restaurant industry through tech.
- Total Addressable Market (TAM) – Zitti’s market potential is immense, with more than 900k restaurants and over $240B in food supplier purchases per year in the U.S. alone.
- Strength of the Team – We have assembled a best-in-class investor roster that includes a who’s who of the fintech and food industries and a best-in-class team, highlighted by my co-founder/COO Erek Benz, who was formerly co-founder of Crexi and other transformative marketplace platforms.
What are the milestones you plan to achieve in the next six months?
We are scaling the team and working closely with beta customers to refine the user experience and ensure Zitti delivers on our promise to help them transform their operations. We’ve already started by bringing on some incredible talent from well-known companies like Oracle, Groupon, and American Express.
We will also invest heavily in data insights, AI, and Machine Learning.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
My key advice would be to clearly identify the milestones that need to be hit before the next capital raise and reverse engineer that to the present day. I also firmly believe in 30-60-90 days plans, as it is important to hold you and your team accountable on tight timelines, especially during the early days when things are moving so fast. If you focus on deploying the capital you have raised to create tangible value and hit your short-term milestones, you will be positioning yourself well for the next round.
Also, don’t be afraid to tell your story as a founder. My authentic experience as an independent restaurateur has proved compelling to investors and new restaurant customers alike.
Where do you see the company going now over the near term?
Our near-term vision is to drive significant value for our restaurant community by streamlining their payments, giving them access to insights that they have never had before, and giving them access to universal payment terms. By owning payments for a rapidly growing customer base, Zitti opens the door to many exciting possibilities down the road where we can leverage our economies of scale to drive even more value for our restaurant customers.
What’s your favorite outdoor activity in LA?
My favorite outdoor activity in L.A. is playing golf. In LA, we are fortunate to have golf as a year-round activity, and I think it’s a great way to clear my head and bond with friends and colleagues who also enjoy playing. I am also very competitive when it comes to sports, and golf is a great outlet that’s also social!