UK hospitality and loyalty platform Velocity has the US market firmly in its sights following the acquisition of American restaurant payment app Cover.
It is Velocity’s first major acquisition since its successful Series A funding round in July.
Initially $12m was announced as the total raise but following a $4m greenshoe it has now increased to $16m – one of the largest ever in hospitality tech.
Cover is a mobile payment app currently accepted in around 350 restaurants in the US. The acquisition is one of the first steps of a global expansion plan set forward by Velocity co-founders Zia Yusuf and Alex Macdonald.
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Macdonald told Growth Business the US was the logical choice for the first target market as it has the “largest service industry in the world”.
“There were challenges due to the cross-border elements of the deal but with my background before starting Velocity, when I was responsible for plenty of M&A activity, we were able to overcome those challenges and we are very much looking forward to working with Cover,” he said.
Following this acquisition the Velocity team are looking to move into further international markets including Asia – where Macdonald explains that “soon half of the middle-class population of the world will live in China”.