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Daily news and analysis about the food tech revolution

Delivery & Commerce

Wells Fargo Picks 5 Indoor Ag Companies for Its Latest Innovation Incubator Program

Five early-stage indoor agriculture companies will participate in the ninth cohort of the Wells Fargo Innovation Incubator (IN2), which works with cleantech companies and entrepreneurs across food and housing sectors. Chosen participants for this cohort will focus on tools and processes that can make indoor farming more environmentally and financially sustainable. 

The Wells Fargo Foundation funds the program, which is co-administered by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL).

Indoor ag has seen some major milestones and investments in 2021, but whether its a truly sustainable endeavor (financially and environmentally) remains a hotly debated topic. For example, growing greens inside fully controlled environments like vertical farms might cut down on inputs like land and water usage, but an enormous amount of energy is needed to run a farm off fully on artificial lighting. (Greenhouses, because they use natural sunlight, are usually a different story.) Additionally, leafy greens are still the only crop large-scale vertical farms can grow in huge quantities, and from a calorie perspective, salad can’t fully feed a growing world population.

Claire Kinlaw, director of Innovation Commercialization at the Donald Danforth Plant Science Center, said in a statement today that this year’s cohort is “focused on validating technologies that address key challenges in the indoor agriculture industry, including environmentally and financially sustainable ways to deliver light, control growth environments, evaluate environmental impacts and solve the need for crop varieties that are well-adapted for indoor environments.”

Companies chosen for the program address these issues and others:

  • Atlas Sensor Technologies monitors water hardness in real time to reduce waste and cost of water and improve how water softeners operate
  • GrowFlux makes intelligent horticulture lighting via an IoT platform the company says can save 20-30 percent in energy costs
  • Motorleaf specializes in AI for indoor ag in order to give growers information around yields and carbon footprint
  • New West Genetics does genomics-assisted breeding for the hemp industry
  • SunPath uses patented fiber optics tech to improve lighting for indoor farms

All participants will receive up to $250,000 in non-dilutive funding from Wells Fargo. Over a 12- to 18-month period, companies will conduct research and development at NREL and at the Donald Danforth Plant Science Center in St. Louis, Missouri. 

Instawork Raises $60M to Connect Local Businesses with Hourly Workers

Instawork, an online marketplace that connects local businesses across the U.S. with available workers, announced today that it has raised a $60 million Series C round of funding. The round was led by Craft Ventures with participation from Grelock, Corner Ventures, Four River Group, WndrCo and Tilman Fertitta (owner of Landry’s and the Houston Rockets). Existing investors Benchmark, Spark Capital, GV, Burst Capital, and SV Angel also participated. This brings the total amount of funding raised by Instawork to $100 million.

Instawork’s platform supports a number of industries, including food and beverage and hospitality, where qualified workers like servers and chefs can post their services. Instawork checks references and makes sure each worker is indeed qualified, then connects them with open shifts available at different companies such as Marriott, Sodexo, and Sun Basket. After a shift, the worker gets paid within hours of completion and can rate their experience.

In a press release sent to The Spoon, the company said it has grown dramactically over the past 15 months and now has more than 1 million workers across the U.S. on its network. Instawork said the number of available shifts on its platform has grown 8x in less than two years, with professionals finding work in less than 24 hours with shifts paying an average of $18 an hour.

Labor remains a hot button issue in the food a beverage sector. Though restaurants and bars have been fully re-opened as the pandemic recedes, they are having a tough time filling open positions as the industry grapples with issues around worker safety and fair pay. As those issues get resolved, platforms like Instawork, ShiftPixy, Shyft, and Jobletics can help fill in short-term workforce gaps.

Valqari Launching Single-Family Drone Mailboxes Later this Year, Targeting $1,500 Price Point

Valqari is looking to launch a retail, single-family version of its drone delivery smart locker later this year, and is working to get the cost of it below $1,500. Valqari Co-Founder and CEO Ryan Walsh laid out the company’s plans during his presentation on StartEngine Shark Pitch with Kevin O’Leary (Mr. Wonderful of Shark Tank) today.

Valqari makes drop-off lockers for drone delivery. These lockers are installed in a fixed location, and drones carrying food or packages land on top of them. The food or package is shuttled from the drone to a designated locker where a customer or delivery person retrieves them via a mobile app.

Walsh spoke at our ArticulATE food robotics conference back in May. While that conversation focused mainly on B2B operations (i.e., restaurants flying meals to Valqari lockers for a third-party delivery person to pick up), he did mention that consumer versions were on the company’s roadmap.

During his pitch, O’Leary asked Walsh mainly about Valqari’s patents and the B2B applications and costs for the service, and the topic of food delivery was not raised in their conversation. Walsh said that there will be a number of payment options (lease versus buy), but O’Leary pressed for actual numbers. Walsh said that the cost would be between $32,000 and $35,000 for the hardware plus a $300/month subscription for business use. Walsh then said that Valqari will launch a single-family version of its locker later this year with the company “working” to bring the cost for that down below $1,500 with an undisclosed monthly subscription. Walsh also said that Valqari revenues are projected to be $12 million in 2022.

The idea of having a smart drone delivery platform in your front yard is enticing. Drone delivery of food, in particular makes a lot of sense when you consider how fast a hot meal can arrive at your door. But even if a retail version of Valqari’s lockers were available later this year in the U.S., drone delivery is still very new and not available everywhere. Big retailers like Kroger and Walmart are already running pilot programs, but laws and regulations around drone delivery are still being worked out. So before you plunk down $1,500, make sure that fancy drone mailbox won’t just sit unused at the end of your driveway.

Aleph Farms Raises $105M in Series B Funding

Cultivated meat company Aleph Farms announced today it has completed a $105 million Series B round of funding, bringing the company’s total funding to date to $118 million. The Series B round was led by L Catterton and DisruptAD with participation from Skyviews Life Science, Thai Union, BRF, and CJ CheilJedang. Existing investors VisVires New Protein, Strauss Group, Cargill, Peregrine Ventures, and CPT Capital also participated in the round.

Israel-based Aleph Farms said the new funds will go towards increasing manufacturing, growing operations internationally, and expanding product lines. Currently, the company is developing a cultivated beef steak and will unveil a prototype for that product in November at the Agri-Food Innovation Summit. 

There is of course an enormous difference between unveiling a prototype and making these whole-muscle cuts of cultivated meat at scale. One of the challenges for cultivated meat companies is being able to produce large quantities of product at a cost that is on par with traditional meat. Aleph Farms launched a new production process at the end of 2020 that will eventually be able to reach that price parity, according to the company.

The process is the first part of a phased build-out for Aleph’s forthcoming pilot production facility, which the company says will be operational by 2022. Aleph Farms also plans to do an initial market launch at that time. The Series B funding will, in bigger-picture terms, go towards helping the company realize that goal. 

Aleph’s announcement today follows recent news from other cultivated meat companies that are also opening pilot production facilities and also aiming for commercial launches in 2022. That includes MeaTech 3D, also based in Israel and also developing whole cuts of cultivated meat. Another Israeli company, Future Meat, has already opened its facility and says it plans to sell cultivated meat in the U.S. by 2022.

Before anyone sells anything, however, these companies must get regulatory approval for each market they want to enter. So far, just one company, Eat Just, has regulatory approval to sell cultivated meat, and that’s only in Singapore. Along with price parity, getting regulatory approval is a major topic in the cultivated meat conversation these days. 

Aleph Farms says it is working with regulatory agencies, though the company did not specify for which markets. Part of the company’s international expansion will be to the United Arab Emirates and the wider Gulf Cooperation Council (GCC) region. Aleph said it is also evaluating the possibility of a manufacturing facility located in the UAE.

Yandex Delivery Robots Coming to College Campuses Courtesy of Grubhub

Food delivery service Grubhub announced today that it will be bringing delivery robots to college campuses this fall thanks to a new multi-year partnership with Russian tech giant Yandex.

Yandex’s rovers are squat, cooler-sized robots that can autonomously traverse pre-mapped areas. As yet, there aren’t a ton of public details on the partnership, such as where the the robot delivery will launch or how much it will cost, but in the press announcement, Yandex said it would be deploying “dozens” of its robots for the program.

College campuses are actually a pretty great environment for last-mile delivery robots. Campuses hold large populations that eat at all hours of the day and night. They are contained geographic with ample pedestrian walkways, and they can be difficult for full-sized delivery cars and drivers to navigate. Robots and their contactless delivery can also be of use in these post-pandemic times for students packed in college dorms. Should someone living on campus get sick, they don’t need to leave their room and stand in line with other people in the cafeteria. Instead, they can ring up a robot and have food delivered, reducing their human-to-human contact.

As such, colleges are among the first places to deploy delivery robots. Starship operates at a growing number of colleges throughout the U.S., and Kiwibot is ramping up its own college food delivery programs as well. Grubhub has existing partnerships with more than 250 college campuses across the U.S., integrating student meal plans with delivery from on- and off- campus restaurants.

In addition to giving Grubhub a robotic entrée onto college campuses, this partnership also gives Yandex its first foray into the U.S. market. Yandex has been making meal deliveries around the Russian cities of Moscow and Innopolis since December of last year.

C3 Raises $80M to Expand Its Virtual Food Hall Concept

Virtual restaurant company C3 (Creating Culinary Communities) has raised an $80 million Series B funding round co-led by Brookfield Asset Management and REEF Technology. Egon Durban and Greg Mondre Managing Partners and Co-CEOs of Silver Lake Partners, along with Dean Adler, Co-Founder of real estate investment firm Lubert-Adler.

C3’s business these days is as much about real estate as it is about restaurants. The company operates more than 40 virtual restaurant brands, leveraging underutilized kitchen spaces around the country to cook and fulfill those orders. For example, the company has a partnership with Graduate Hotels and uses kitchen spaces at Graduate locations to serve delivery-only orders to guests and the surrounding community.

In March of this year, C3 said it would also bring its virtual restaurant concept to residential spaces, starting in Nashville, Tennessee and Phoenix, Arizona. The company recently partnered with Kitopi to take C3 brands overseas to the UAE, has a deal to use Reef locations for kitchens, and last month said it would make its virtual brands available to Chowly’s 10,000-plus restaurant customers.

For all C3 concepts and partnerships, meals are available through the company’s CITIZENS GO mobile app, which is powered on the back end by online order company Lunchbox’s software.  

The $80 million fundraise will go towards further expansion in the form of signing leases with real estate developers at various mixed-use, retail, and hospitality spaces. According to today’s press release, these leases will serve to open CITIZENS food halls, which are brick-and-mortar versions of the C3’s virtual food halls. These spaces will also provide additional kitchen space with which to fulfill delivery-only orders for C3 brands. 

The virtual food hall concept itself isn’t new, with companies like Deliveroo, Zuul, and others employing their own versions of it. Few have pursued expansion as aggressively as C3, however. The latter says it has opened 250+ digital brand locations in the U.S., will have 1,000 by year’s end and is on track for 12,000 kitchens globally by 2023. 

Voice bots and Back Office Tasks: A Mid-year Look at Restaurant Tech

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As we’re fond of saying lately, last year’s pandemic-induced chaos accelerated the restaurant industry’s adoption of technology so much that about a decade’s worth of changes happened in the span of a couple months. Investor, restaurant tech guru, and friend of The Spoon Brita Rosenheim highlighted that point recently when she released her 2021 Restaurant Tech Ecosystem Map. 

The map, while not exhaustive, includes a staggering number of companies across many areas of the restaurant business, from ordering and delivery tech to back-office tools, business intelligence, corporate catering and ghost kitchens. Even a casual glance shows just how enormous (or bloated, depending on your point of view) the restaurant tech sector has gotten over the last 18 months. 

Brita has her own takeaways and predictions bundled with her map, and you should definitely read through them if you are interested in learning more about restaurant tech’s near-term trajectory. Here, I’ll add a few of my own thoughts to the mix, including:

Rise of the voice bot. This is one category that’s slowly but steadily grown a presence in the restaurant industry over the last few years. But excepting maybe Domino’s chatbot, widespread voice-tech implementations at restaurants are still rare, though that will likely change in the next couple of years. McDonald’s threw heat on this topic last month by announcing it is currently testing automated ordering via voice tech at 10 locations, and that it expects this technology to be in all of its locations within the next five years. Meanwhile, the current labor shortage has left restaurants scrambling to make their operations more efficient. If correctly executed, going fully autonomous with the order process could shave seconds off every individual customers’ order. And those seconds (and costs) add up fast. 

The analytics opportunity. Marketing analytics for restaurants are another “it” category at the moment, if its slice of the restaurant tech pie above is any indication. In the words of Adam Brotman, CEO of Brightloom, online ordering tech has become “a commodity,” and that the next big frontier for restaurant tech is around analytics. When Brotman and I spoke a few months back, he explained that data — about customer preferences, transactions, order histories, etc. — is a huge opportunity for restaurants if they can figure out how to harness it. Seeing as that’s no small feat technically, a huge number of analytics and CRM companies have cropped up offering solutions to smaller businesses that can’t build these programs in-house. Expect more companies and much consolidation in this category.

Back-office bonanza. The sizable slice back-office tech gets in Brita’s market map reflects a trend we’ve written about before: that investment and interest in back-office tasks will continue to attract attention in the coming months. The back office was probably once the most “un-sexy” area of restaurant tech, since most of it has to do with digitizing invoices and schedules and helping businesses run payroll. One pandemic later, restaurants are trying to save on costs in as many areas as possible, and a surprisingly effective way to do that is through digitizing, centralizing, and streamlining some of these previously boring tasks. Like analytics, this category will see a wave of consolidation in the future, and in fact that is already happening.

As always, I welcome your thoughts on my thoughts, now and in the coming months as restaurant tech continues to evolve.

More Headlines

Local Kitchens Raises $25M for Its Virtual Food Hall Network – The ghost kitchen/virtual food hall, started by three ex-Doordash employees, has raised Series A funding roughly one year after launching.

Mobility Service Helbiz Opens Its First Ghost Kitchen – Italian-American mobility company Helbiz announced today it is launching its own ghost kitchen/food delivery/virtual restaurant business called Helbiz Kitchens.

Miso and Lancer Worldwide Aim to Automate Beverage Dispensing for QSRs – Miso announced a partnership with Lancer Worldwide, a global manufacturer of beverage dispensers, to develop an automated, intelligent system designed to speed up and organize drink orders.

Fraîche’s Smart Fridges Aim to Help NYC Offices Freshen Up Lunch Options

One of the big questions companies face as more of the population gets vaccinated is if and how they will re-open their physical offices. As Bloomberg wrote last month, some workers are just quitting their jobs instead of returning to offices. As such, companies are looking for ways to entice employees back into the building with different schedules and perks. Fraîche is pitching its smart fridges as one of those perks that can help ease people back into office life. The company is installing 10 of its fridges in locations across New York City this September.

On it’s face, Fraîche is kind of like Byte Technology in that it makes smart fridges where customers can grab what they want and get charged automatically. Unlike Byte however, Fraîche isn’t licensing its technology out to other retail brands. It will operate each fridge by itself and control what goes inside.

Technically speaking, Fraîche’s fridges work only with the accompanying app (unlike Byte, which allows you to swipe a credit card). Users create an account with the Fraîche app, including a selfie and their payment information. They can then check the inventory of their local fridge from the app, and when they go to grab something, the Fraîche fridge uses facial recognition (based on the selfie) to unlock itself. People take what they want and computer vision inside the fridge automatically keeps track of the items and charges users accordingly.

There are two main parts to Fraîche’s pitch. First, it can offer companies healthier, fresh food for employees without the need to build out a cafeteria or other on-site services. Smaller companies can’t afford to have such a cafeteria to begin with, and larger companies are figuring out their on-site food strategies. A Fraîche fridge can be stocked with healthy food choices, and is available around the clock.

The second part of Fraîche’s pitch is that, like Byte, companies can subsidize as much of the food offered as the like. So companies could foot the bill for half of a meal, or all of it, depending on their needs and budget. Tximista Lizarazu, CEO & Co-Founder at Fraîche told me by video chat this week that most companies he is talking to are choosing to subsidize food 100 percent. “They want to subsidize to make the office a better place than it used to be and convince people to come back,” Lizarazu said.

It’s not just companies that are interested in Fraîche, however. Building owners, too, are looking to attract tenants back, and Fraîche’s smart fridges are part of those leasing perk packages.

Right now Fraîche is focused solely on New York City. The company charges a monthly service fee to operate and maintain the machines, and also generates revenue from selling food. Fraîche currently makes and sells its own line of meals through its machine, but Lizarazu said that the company will be phasing that out in January to selling only food from local New York brands.

Fraîche started two years ago and has raised $1.2 million in Pre-Seed funding so far. Lizarazu said the company is stronger now than it was prior to the pandemic. “What we are doing is perfect for these hybrid offices,” he said. “We are in a better position now post-COVID, because of the health and wellness component.”

The question remains, however, whether food will help bring people back into offices.

Following Tensions, McDonald’s Cuts Tech Fees for Franchisees by 62 Percent

McDonald’s will cut technology fees for its U.S. franchisees by 62 percent following a third-party review of of billing, according to a report from Bloomberg. 

The original $68 million was announced in December of 2020, when corporate said it would charge franchisees a $423-per-month fee to cover a lag in outstanding technology fees. Outrage ensued from franchisees, who have pushed back against some of McDonald’s tech-related decisions in the past.

Those clashes have included everything from store design overhauls to disputes over delivery. At the same time, McDonald’s has been aggressively pursuing new technology implementations in an effort to digitize its fast-food business. It acquired AI company Dynamic Yield and voice-tech company Apprente in 2019. And though the chain has downgraded its Dynamic Yield implementations of late, it appears to be increasing its efforts around voice tech. McDonald’s latest move has been to implement voice-order technology at 10 stores in Chicago in an effort to automate more of the drive-thru experience for customers. At the time of that announcement, McDonald’s CEO Chris Kempczinski suggested we’ll see voice-ordering at all McDonald’s in the next five years.

Additionally, McDonald’s is one of the many QSRs to release new store designs following 2020’s upheaval. Future locations could prioritize formats like drive-thru and curbside pickup, and emphasize mobile ordering and more tech in the drive-thru lane(s).

Franchisees have argued against some new technologies in the past. It remains to be seen how onboard they will be with further digitization of the business in light of this new agreement with corporate. 

Franchisees own about 95 percent of all McDonald’s locations in the U.S.  

PitchBook: More than $10B Invested in Grocery Startups This Year

We’ve been saying that investment in grocery startups is downright frothy this year, and now PitchBook has put a number to all this VC activity. CNBC reports that venture-backed grocery startups have raised $10 billion so far in 2021, according to PitchBook’s data, vaulting past the $7 billion raised in the sector last year.

Part of the reason for the big jump is the mega-rounds that some grocery startups around the world raised during the first half of this year:

And that doesn’t even count all the other, smaller fundraises that have happened for companies like Food Rocket and Fridge No More.

The pandemic certainly had a hand in driving all this frothiness. Lockdowns, social distancing and general fears around catching COVID-19 pushed record amounts of people into online grocery shopping in 2020. Additionally, there are a wave of startups like Gorillas, and Gopuff and Fridge No More that are creating an entirely new type of on-demand, speedy delivery model. These companies operate dark stores in neighborhoods with a small delivery radius, promising grocery delivery in as few as 10 minutes. This is a new concept for most shoppers, and the allure of tapping a few buttons on your phone and food arriving minutes later could upend the way we buy groceries.

CNBC adds that all of this massive funding is disproportionate to the opportunity in the online grocery category. As such, there could be a wave of consolidation coming soon. This is true whenever money floods a particular sector, and it is especially worth considering given the fluctuating state of the pandemic.

Questions around how much consumers will stick with online grocery shopping once the pandemic recedes remains unclear. Vaccines have helped abate the virus, but they are rolling out at different paces around the world, and viral variants threaten to bring resurgences in case numbers. Brick Meets Click reported that online grocery shopping dropped to $7 billion in sales this past May, down 16 percent year-over-year. But that $7 billion figure is still 3.5 times higher than pre-pandemic online grocery sales.

But none of what might happen can change what’s already been done. That $10 billion has been invested, now we’ll just see which companies can bring bring returns.

Vegano Launches an All-Vegan E-Commerce Grocery Marketplace in Canada

Vancouver, Canada-based startup Vegano launched an online vegan marketplace today that will function as an e-commerce grocery-delivery storefront for plant-based food items.

For now, the service operates in the Metro Vancouver area as well as Squamish and Whistler. The company said it plans to expand to Toronto and Montreal by the end of this year in addition to heading Stateside and launching in Los Angeles. 

As its name suggests, Vegano sells 100 percent vegan foods sourced locally to each area the company serves. Up to now, this has been primarily through the Vegano’s meal kit service. Each week, users can pick three meal kits, which are delivered with pre-portioned ingredients and cooking instructions. Vegano says meals can be prepared in 30 to 45 minutes. 

The new online marketplace currently sells around 500 items from brands like No Whey Foods, Very Good Butchers, Field Roast, and others. The company said it plans to bump that number of products up to 10,000 by the end of 201. While shoppers don’t have to be existing Vegano meal kit subscribers to order from the marketplace, there is a $9.99 delivery fee for non-members. Members, meanwhile, can choose marketplace items and arrange to have them delivered on the same day as their meal kit.

Vegano says it has experienced a 150 percent growth in sales since January 2021. And little wonder, given the rise in sales of plant-based proteins around the world. Canada, specifically, got a major boost in this area last year when one of its own plant-based food producers, Merit Functional Foods, nabbed a $100 million investment from the government. Additionally, companies like Impossible and Eat Just have expanded their product lines to Canadian restaurants and retail shelves. The overall market for plant-based protein in Canada is expected to grow 14 percent annually by 2024.

Vegano closed a $4.2 oversubscribed round of Series A funding in March of this year. Funds are going towards scaling the company, and growing its marketplace and CPG offerings, in addition to accelerating product development. The company also plans to launch its own line of products to its marketplace by the end of this year.

Czech Online Grocer Rohlik Raises $119M, Its Second Nine-Digit Round This Year

Czech online grocery startup Rohlik announced today that it has raised a €100 million (~$119M USD) Series C round of funding. TechCrunch was first to report the news, writing that the round was led by existing investor Index Ventures, with participation from Partech and Quadrille Capital, who had also previously invested in Rohlik.

This funding comes just months after Rohlik raised a €190 million (~$230 million USD) Series B round in March of this year. This brings the total amount of funding raised by Rohlik to nearly $380 million, and according to TechCrunch, Rohlik is now valued at €1 billion (~$1.2 billion USD).

That Rohlik is able to raise gobs of money in such quick succession is not a surprise. Investment in the online grocery space has been frothy this year, with players like Weee!, Instacart, Xingsheng Youxuan and many more all hauling in big rounds in the first half of 2021. Driving much of this investment is the pandemic, which pushed droves of people into avoiding public spaces and buying their groceries online for either pickup or delivery.

More recently, funding has been going towards smaller, dark grocer stores that promise grocery delivery in under fifteen minutes. Companies like Gorillas, Getir and Gopuff have also raised tons of cash for rapid expansion this year. Rohlik, however, is more of like a traditional big-box online grocer offering delivery in two hours. This “slower” approach doesn’t seem to have impacted the bottom line. Rohlik told TechCrunch that its revenues in 2020 passed €300 million with more than 750,000 customers, with basket sizes between €60 and €100 per order.

The pandemic remains the big question mark looming over the entire online grocery space. While vaccines are rolling out around the world, many countries in Europe have only a third of their populations fully vaccinated as of now, and the full effect of complications like the Delta variant remain unknown. How potential resurgences in the virus could impact how people shop for groceries remains to be seen.

For its part, Rohlik has already expanded its services to Hungary and Austria, with plans to move into Germany, Romania, Italy, France and Spain.