Lunchbox, a relatively new entrant to the restaurant-tech scene, just announced a $2 million seed round for its software that simplifies restaurants’ task of managing orders from multiple sales channels. The round was led by Primary, 645 Ventures, Salido founder Shu Chowdhury, and Ananda Gala. This is Lunchbox’s total funding to date.
Restaurants pay a monthly fee for Lunchbox’s software, which bundles order processing, loyalty program capabilities, delivery dispatch, marketing, analytics, and more into a single package. The system is meant to address an issue businesses currently grapple with as more and more technology makes its way into restaurants: how to process and fulfill orders coming in from multiple sales channels. Off-premises dining now makes up more than half of all restaurant orders, which has led to more loyalty programs, mobile apps, self-order kiosks, and other customer-facing technologies. But with those many order channels comes an increasingly fractured tech ecosystem for restaurants.
In materials sent to The Spoon, Lunchbox points out the limitations of this setup: software systems that don’t talk to one another, extra devices, expensive setup and monthly fees, to name a few. Partnering with a third-party delivery service simplifies some of this, but as is well-documented, small and mid-sized restaurants struggle to pay the hefty fees Grubhub and DoorDash charge for this simplification.
Those smaller businesses are exactly the restaurants Lunchbox is targeting with its platform. “We’re trying to empower everyone,” Lunchbox co-founder Nabeel Alamgir told me over the phone, adding that more than half of the hundreds of thousands of restaurants in the U.S. are smaller chains and independent restaurants. “My favorite restaurant groups usually [only] have three or four restaurants,” he said. “We’re trying to sign up the clients we want to visit.”
Currently, the company counts Gregory’s Coffee, David Chang’s Fuku, and Northeastern yogurt chain 16 Handles among its clients. NYC chain Bareburger, which Alamgir was formerly the CMO, is also a client.
To use the Lunchbox platform, restaurants pay between $200 and $600 per restaurant per month. Those restaurants with fewer than 10 locations also pay a $10,000 setup fee. That sounds hefty until you compare it to another system Alamgir cited (name withheld) that costs over $1 million to onboard and $156,000 to use monthly.
And bypassing omni-channel ordering isn’t really an option for restaurants nowadays. Off-premises orders are expected to drive the majority of sales for restaurants over the next decade. At the same time, the ability to personalize these experiences will soon start separating the winners from the losers. Helping restaurants without the deep pockets of large chains juggle these expectations and removing some of the headache from the process is Lunchbox’s main mission right now.
The company will use the new funding to expand and add more restaurant clients over the coming months.
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