Venture capitalists are increasingly taking an interest in the food business, with several start-ups trying to bring fresh thinking to what consumers put on their plates.
Now, Stephen M. Case, the investor who co-founded AOL, is betting on a company that he thinks has the potential to become a leading restaurant chain.
The Revolution Growth fund, which Mr. Case started with two former AOL colleagues, announced on Wednesday a $22 million investment in Sweetgreen, a “farm-to-table†salad chain based in Washington. Mr. Case will join the board of Sweetgreen and act as an adviser to its founders, according to the announcement.
The company, founded in 2007 by three Georgetown University graduates, has expanded to 22 restaurants across the East Coast. It is using the fresh capital to help finance its continued growth, which includes the planned addition of restaurants in New York, Philadelphia and Boston.
“The food industry is ripe for disruption,†Mr. Case, who previously made an angel investment in Sweetgreen, said in an interview.
His fund’s bread and butter, so to speak, is technology companies, and this investment is its first related to food. Revolution, which, like Sweetgreen, is based in Washington, is taking a “meaningful minority stake†in the company, Mr. Case said.
In certain ways, Sweetgreen has used technology in its business. It recently introduced a mobile payments and rewards app, for example, that it says is used by one in five of its customers.
Mr. Case also noted that two successful initial public offerings this year were of food companies: the sandwich shop Potbelly and the restaurant chain Noodles & Company. He also pointed to the success of Starbucks and Chipotle, as well as the yogurt maker Chobani.
“I do think there will be a Chipotle equivalent in the healthy dining category,†he said. “I think Sweetgreen is well positioned to be that iconic brand in this next wave.â€
In addition to offering salads in a casual setting, Sweetgreen tries to engage its customers by advertising its commitment to local farmers and sustainability. The company also started a music and food festival, Sweetlife, featuring trendy musicians and a certain back-to-the-land vibe.
Nicolas Jammet, one of the three founders, said the salad shops sought to combine convenience with an aspirational brand.
“We had this problem in our daily lives where we had nowhere to eat that was cool and fit our values,†Mr. Jammet said in an interview. “The idea was to create a place where you could have a conscious and healthy experience and still enjoy it.â€
He and his co-founders, Jonathan Neman and Nathaniel Ru, also had another motive.
“We loved the idea of creating something and not going to work for a consulting firm or an investment bank,†Mr. Jammet said.
