MOD Pizza announced on Tuesday it had raised another $160 million, bringing its total equity capital raised to $335 million.
The fast-casual pizza brand is one of the fastest-growing chains in the restaurant industry, opening a net 102 locations in 2018 — an increase of 34%.
CEO Scott Svenson told Business Insider that MOD will use the $160 million to continue its rapid growth, as the chain works to reach 1,000 locations within the next five years.
MOD Pizza is refusing to slow down in its quest to reach 1,000 locations.
On Tuesday, the fast-casual pizza chain announced a $160 million equity financing round led by private-equity investment firm Clayton, Dubilier & Rice. Including this round of funding, MOD has raised $335 million to date.
MOD has more than doubled its size over the last three years, with Nation's Restaurant News naming the brand the fastest-growing major chain in the entire restaurant industry. In 2018, MOD added 102 locations — an increase of 34% — and grew systemwide sales to $398 million, up 45% from the prior year.
"For the past four years, we've been the fastest-growing restaurant brand in the country. And, that rate of growth requires capital," Scott Svenson, MOD's cofounder and CEO, told Business Insider.
The $160 million round of funding is crucial to MOD's plan to continue its explosive growth, with Svenson saying the chain plans to reach 1,000 locations within the next five years in an effort to cement its place as the dominant fast-casual pizza brand.
"We ultimately decided that if we were going to become the leader in this category ... we need to get out and be aggressive about our growth in this kind of formative stage of the category," Svenson said.
Svenson says that there is a "strong case" to be made that there are already more restaurants open across America than can feasibly survive and grow sales. However, this argument has not convinced him that MOD should slow its expansion efforts, as he says MOD plans to continue to open roughly 100 new locations a year.
"Consumers are leaning into brands that are more relevant, that are delivering a product and an experience that's more in keeping with what they're looking for today," Svenson said. "We are, I think, one of the brands that is benefiting from that."
Svenson also points to the chain's commitment to social impact as crucial to its success. MOD recruits workers who might otherwise struggle to find employment, including people who were previously incarcerated. Perks such as higher pay, free meals, and a fund that employees can access during emergency situations help build culture and reduce turnover, Svenson says.
"Profit and social impact can coexist. And, not only can they coexist, but if you do it well it can lead you to build a stronger and more relevant and more sustainable business," Svenson said.