As food delivery demand continues to grow, restaurants are at a crossroads: do they continue utilizing third-party delivery or try to become more independent? Despite competition from emerging technology toolboxes that encourage restaurants to DIY their technology stacks, third-party delivery is very powerful and now Lyft is entering the fray in partnership with Olo.
Besides more delivery competitors, this month, we noted acquisition news from Reef and Snackpass, as well as continued waves of fundraising for up-and-coming restaurant technology companies, including mobile ordering company Mr. Yum and Miso Robotics.
Tech Tracker rounds up what’s happening in the technology sector of the restaurant industry, including news from restaurants, vendors, digital platforms, and third-party delivery companies. Here’s a breakdown of what you need to know and why:
Lyft enters restaurant delivery industry in partnership with Olo
Olo is now partnering with Lyft to help handle digital orders for its network of restaurants through the Olo Dispatch solution, which will automatically ping nearby third-party drivers for food orders generated through a restaurant’s website or app.
"We’re excited to enable local delivery for merchants with Olo Dispatch,” Justin Paris, head of Lyft Delivery said in a statement. “As a transportation-focused company, we aren't interested in building consumer-facing marketplaces for groceries or food, but we can add real value in delivery both for drivers and partners via Dispatch's frictionless process and the scaled national network of drivers on Lyft's platform.”
- Why it matters: We’re surprised it took so long for Lyft to enter the food delivery fray, as its competitor, Uber, has long been a major player in the third-party delivery industry. With a major partnership with Olo under its belt, Lyft could divide the market share even further in the food delivery space, even as the space becomes increasingly crowded.
Reef Technology acquires ghost kitchen company 2ndKitchen
2nd Kitchen — a ghost kitchen company specializing in providing offsite foodservice for hotels, bars and offices in partnership with local restaurants — was acquired by parking realtor and virtual restaurant operator Reef Technology on Dec. 7. 2ndKitchen will now operate under Reef’s hospitality division and help expand the virtual restaurant giant’s reach to new locales and types of businesses. Terms of the acquisition were not disclosed.
“Reef, the neighborhood company, is the perfect partner to help us rise to the next level,” Nick Anastasiades, CEO and co-founder of 2ndKitchen, said in a statement. “Our business’ foundation is its highly differentiated technology that allows businesses to tailor their food experience to their exact needs, and I believe there is still tremendous, untapped market opportunity.”
- Why it matters: This is the second acquisition for Reef in the past two months. As the company continues to grow in the ghost kitchen space, its strategic acquisitions will help it become a tech stack of choice for virtual restaurants. This partnership will open up Reef’s sphere of influence to hotels and bars.
Digital ordering company Presto goes public; partners with robotic startup Ottonomy
Presto — a digital ordering systems provider — announced on Nov. 10 that it is going public by merging with SPAC Ventoux, with an initial valuation of $1 billion. Presto is known for its automation solutions technologies for restaurants, offering services like kiosks, tablets and speech recognition, so operators can cut down on labor needs. Presto’s customers include McDonald’s, Chili’s, and Applebee’s.
One month later, Presto announced a partnership with robotics company, Ottonomy, adding another technology capability to Presto’s technology stack: autonomous delivery vehicles, which can shuttle food to customers in restaurant parking lots or for curbside pickup.
- Why it matters: Presto is one of several restaurant technology companies that have gone public this year, the most high-profile of which is Olo in March and Toast in September as restaurant tech continues to dominate operator needs. It’s a race to the top as more tech companies combine to become one-stop-shopping solutions for operators.
Snackpass acquires ‘priority lane’ creator Sleek
Snackpass — the socially-focused food takeout platform that has been popular with college students — announced in November the acquisition of San Francisco-based Sleek, which adds a “FastPass”-esque feature to food and entertainment venues, allowing customers to skip long lines for popular eats spots.
Snackpass will be able to incorporate Sleek’s technology into its own platform and calculate more accurate wait times. Financial terms of the deal were not disclosed.
- Why it matters: For a restaurant technology company that prides itself on its popularity with younger customers, a partnership with a company that lets people skip lines makes sense. We would not be surprised if premium line-skipping features or order prioritization makes their way to other ordering platforms.
Mr. Yum, Spothopper, Miso Robotics, Union all announce fundraising rounds
In a flurry of fundraising rounds this month, mobile ordering and payment company Mr. Yum announced a $65M USD Series A round, led by New York investment firm Tiger Global. Mr. Yum’s successful fundraising venture was joined by restaurant marketing and operations technology company, SpotHopper raising $14 million in Series A funding led by TVC Capital; Flippy the robot’s creator Miso Robotics raised $35 million in its latest round of fundraising; and POS engagement platform Union announced $22 million in Series B funding.
- Why it matters: Restaurant tech companies continue to attract investors like flies to honey as market demand for digital solutions continues. Investments will likely only continue to grow as the restaurant industry enters a post-pandemic era of increasing consumer digital demands.
DoorDash makes geofencing easier for independent restaurants
Swipeby, the curbside pickup platform, has partnered with DoorDash to make pickup easier for customers with geofencing technology that knows when they arrive to a restaurant’s vicinity via a “virtual drive-thru” solution. Swipeby will also let independent restaurants process commission-free deliveries and keep customer data through its third-party delivery management platform.
- Why it matters: It’s become clear that restaurant technology investments are not just for the big chains. With this partnership with Swipeby, DoorDash will help make curbside technologies more accessible to the mom-and-pop restaurants.
In other “can’t miss” technology news….
Software technology provider SpotOn acquired Dolce Software to help restaurants with labor management, integrating scheduling, compliance, payroll, and tips distribution in one platform. Chef José Andrés’ ThinkFoodGroup is now partnering with the SevenRooms platform, giving Andres’ restaurants access to customer data.
Also, you might see more drone-enabled food deliveries zipping overhead. Flytrex drone delivery company has received permission from the Federal Aviation Administration to increase the delivery radius capabilities to one mile.
Contact Joanna at [email protected]
Find her on Twitter: @JoannaFantozzi