Butterfly Buys a Brand Ahead of Its Time


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The fast-casual segment appears to be evolving, causing private equity investors to pursue brands featuring menus ahead of their time. Case in point: Modern Market. Founders of the 30-unit chain sold controlling interest in late February to Butterfly Equity, a Los Angeles private equity firm specializing in “seed-to-table” investments.

“Investors felt that Modern Market was right on trend with what customers are looking for and where the industry is going,” said Piper Jaffray Managing Director Damon Chandik, who advised co-founders Anthony Pigliacampo and Robert McColgan on the sale.

Many fast-casuals are now attempting to satisfy increasingly health-conscious diners (particularly young customers) with farm-to-table formats but fail to expand. “It’s just really difficult to scale them,” Chandik said.

Modern Market, which operates units in six states, features vegetable-heavy dishes, nitrite-free meats, and pasture-raised eggs. Its website boasts breakfast, lunch and dinner menus accommodate “virtually any dietary requirement—vegan, celiac, paleo, raw, south beach, high carb, low carb, and also low GCI.”

Angel investors had funded Modern Market since its founding in 2009. The co-founders were now looking for a private equity group familiar with early-stage, high-growth companies, particularly in the restaurant space.  

“Butterfly are the guys who came out of KKR  and who had done the investment at Lemonade. So they were experienced investors,” Chandik said. He added that Butterfly, founded last year, was still raising a reported $400 million fund: “We could see they had the money, though they hadn’t officially closed the fund.”

The sales price, though unannounced, was based on a multiple of sales given the near absence of EBITDA, Chandik noted.

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