Restaurant Technology M&A Ripe for Consolidation in 2025, 2026

The restaurant technology sector is poised for a surge in mergers and acquisitions (M&A) activity as restaurants increasingly adopt digital solutions to streamline operations, control costs, drive revenue growth, and enhance customer experiences. The massive addressable market for restaurant technology has created a fragmented landscape of point solutions that is ripe for consolidation. 

After a quiet couple of years post-COVID, 2024 showed modest signs of market improvement as both macro-economic conditions and restaurant top-lines improved, leading restaurant technology buyers and sellers to feel more comfortable wading into the dealmaking space. A consistent flow of acquisitions and funding rounds is evidence of restaurants’ growing appetite for new technology. Strategic consolidators have shown a continued appetite for M&A. A wave of consolidation will mark the next two years as companies reach an inflection point at which they will have to decide whether to acquire or sell.

From 2019 to 2022, more than $44 billion in venture capital and growth equity was raised into the restaurant technology sector, with the height in 2021, according to Pitchbook. Companies that have raised significant capital during this period but have faced challenges meeting their operating plans or achieving expected growth will have to face a ticking clock. Some were hit hard during COVID, losing 75% to 100% of their revenue almost overnight and rebuilding from the ground up. This has created a delayed impact, particularly for those private equity-backed companies with a typical five- to seven-year investment horizon, as the pandemic extended that timeline. 

Now, more than two years post-COVID, the pressure is mounting. While some businesses have recovered and performed well, others continue to struggle to survive. On one hand, there are well-performing companies that are establishing themselves as “strategic buyers of choice”, many of which are either already publicly traded or private equity-backed portfolio companies. On the other hand, the companies performing below investor expectations will be in a position where they need to find buyers. The bottom line is that companies that have been waiting for the last few years because of depressed market multiples or awaiting a rebound in performance that hasn’t happened won’t be able to sit on the sidelines any longer. 

Notable M&A Activity Bolsters Confidence Among Buyers & Sellers

In addition to the amount of capital raised that will drive consolidation in the sector, notable acquisitions in 2024 have created a boost of confidence for buyers and sellers for the second half of 2025 and into 2026.  The restaurant technology sector continues to attract strategic and private equity investment. These transactions represent various types of participants in the market, from large public companies to smaller private companies, as they continue to make strategic acquisitions to further build out end-to-end solutions. 

In January 2025, PAR Technology (NYSE: PAR) announced it was expanding its restaurant analytics and back-office capabilities with the acquisition of Delaget, a provider of restaurant data and analytic solutions.  This transaction comes on the heels of PAR Technology’s other transactions last year. In July, it acquired Australian company Task Group for $206 million, while in March of 2024 PAR acquired the convenience store-focused digital engagement software company Stuzo for $190 million.

Shift4 acquired Revel Systems in May 2024 for $250 million and went on to acquire POS solution provider Vectron Systems in June, and Givex in August.

PAR Technology and Shift 4 are the latest examples of public companies acquiring multiple assets in space to further bolster their platforms with new capabilities. Another major player in the industry that is expanding its presence across the restaurant and  hospitality ecosystem is British multi-vertical market software company The Access Group.

In November 2024 the Access Group acquired Paytronix Systems, a restaurant customer engagement and payments software provider owned by Great Hill Partners. Prior to the acquisition of Paytronix, the Access Group was already working to increase its’ North American footprint with the acquisition of hospitality digital order and pay specialist QikServe in September and global hotel and casino technology specialist SHR Group in June.

Building on the wave of hospitality technology acquisitions, it’s worth noting that the Access Group further strengthened their capabilities in both the restaurant and the broader hospitality ecosystems with the acquisitions of Guestline, a hotel distribution and operations platform provider, and ResDiary, a provider of bookings and table management software, in 2023.

Market Trends

As restaurant operators continue to face challenges from rising food/labor/operating costs, a significant labor shortage, and heightened regulatory environment, improving efficiency and streamlining operations will be paramount for driving profitability. This is why operators are focusing on the adoption of technology such as cost-management tools and efficiency-focused software to optimize front- and back-of-house performance, control costs and maintain the health and safety of the restaurant. According to the National Restaurant Association’s “Restaurant Technology Landscape in 2024” report, 47% of operators say that technology and automation (to help with a current labor shortage) will become more common within their industry.

Agentic artificial intelligence (AI) is expected to significantly disrupt the restaurant technology sector within the next 6 to 12 months. Companies will need to adapt swiftly to this emerging technology or risk obsolescence. The ability to harness AI for efficiency, personalization, and operational improvements will define market leaders. Those who don’t will be left behind.

Valuation Drivers

Valuation drivers in the restaurant technology sector, like most vertical software segments and the software landscape in general, have shifted from a growth at any cost mentality to a focus on both growth and profitability.   The “Rule of 40” is driving valuation constructs today, with a heightened importance of showing a balance of both growth and operating profitability.  The days of buyers paying high multiples for companies growing exceptionally well but burning cash in an effort to chase this growth are over.  Additional key focus areas for buyers today include gross margin profile, gross/net retention metrics and customer acquisition costs. 

Looking Ahead

The restaurant technology market’s fragmented landscape presents significant opportunities for consolidation. Large public companies and private equity-backed platforms are acquiring smaller, innovative firms to create integrated solutions that streamline operations, boost efficiency, and improve customer experiences. Key going forward will be the continued platform build-out of private equity backed strategics that are looking for product bolt-ons to bolster their “one-stop” solution aspirations. These businesses have the fiscal means to do more M&A, an appetite to show inorganic growth and will be looking to be more active in this buyer-favorable multiple environment. These acquisitions will reshape the competitive landscape but also drive technological advancements that benefit restaurant operators and consumers alike.