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Daily news and analysis about the food tech revolution

Delivery Hero

Restaurants Are ‘Always Blamed’ When It Comes to Bad Delivery. Here’s How Tech Can Help

Who is responsible when something goes wrong with delivery?

A succinct-yet-apt answer to that question recently came from fast casual chain Wow Bao’s President and CEO Geoff Alexander, who spoke at The Spoon’s Restaurant Tech Summit this week: “As the restaurant brand, you are always blamed.”

If you’ve ordered via third-party delivery with any frequency, you’ve likely dealt with the following scenario: The order is late or does not arrive. The customer calls the delivery service and gets an automated response. The customer calls the restaurant itself, who may not know where the food is because it left the the building ages ago. If and when the meal finally arrives at the consumer’s door, it will be cold, soggy, dry, or all of the above. It’s usually not DoorDash, Uber Eats, or any other delivery service that gets blamed for these problems. 

By way of example during the event, Alexander brought up Fargo, North Dakota, where Wow Bao operates one of its dark kitchen locations. For these kitchens, other restaurants cook some of the Wow Bao brand’s signature items and sell them on the usual third-party delivery channels as a way to make incremental revenue. Wow Bao has about 350 dark kitchen locations around the country right now, with a “moonshot goal” of reaching 1,000 by the end of the year. 

Brand integrity is always something to watch for with these kitchens. “When an issue happens there, it’s not Wow Bao,” Alexander explained at the event. “It’s somebody running one of our dark kitchens. And [the food is] delivered via one of three or four delivery platforms. I get the phone call. Wow Bao corporate gets the phone call, we get hit on Instagram or social or Google Reviews. That whole brand transfer hast to be the most guarded and respected piece by the brand itself and by the operator to work together. At the end of the day, the way that guest is handled is what’s going to decide if the guest is going to come back and who they’re gonna tell.”

As to how tech can help restaurants guard this brand transfer, the other panelists pointed to tools that can optimize operations. Ava Ghaiumy, Delivery Hero’s regional director for global foodservice operations, pointed out that there is “almost no bigger KPI than speed.” Her company, which is investing heavily in various tech initiatives, is working on things like improved dispatching and rider-tracking features that can help with speed of service when it comes to delivery.  

Olo’s Marty Hahnfeld, who was also on the panel, said it’s all about “precision in operations.” That includes improving order accuracy, making sure menus are up to date across all ordering channels at all times, and that pricing is correct on those channels as well. Olo offers its Dispatch service that allows restaurants to order directly from a restaurant’s own website or mobile app. Though in most cases, there is still a reliance on third-party delivery to handle the last mile.

At the end of the day. the most important technology to keeping brand integrity intact may be one that’s been around for quite some time: the POS integration.

Such an integration connects, among other things a restaurant’s main POS system with the many different channels through which customers buy meals nowadays, including third-party delivery. Whereas in the old days (two years ago), delivery services provided an external tablet and restaurant staff manually key’d in orders to the main POS system, more restaurants are now directly connecting delivery to that main system. Panelists were unanimous in their belief that this is an extremely important technology when it comes to improving order accuracy, timing, and a generally smoother experience for everyone.  

Meet The Spoon’s Restaurant Tech 10

The restaurant industry has changed drastically over the last 18 months when it comes to tech. What was once a sector slow to change and reticent to embrace digital is now practically at bursting point in terms of the many technological solutions available to restaurants. As food tech investor Brita Rosenheim recently wrote, “the past 18 months, technology solutions across the restaurant and hospitality industry evolved at such a fast pace that keeping up with changes proved challenging, even for those of us who work in the space. This rapid rate of adoption in the industry caused even the technophobes in hospitality to rapidly embrace tech solutions. “

Picking just 10 companies from the hundreds out there was a Herculean challenge when it came time to make this list. From virtual restaurants to maintenance management solutions to making better use of data, there’s no end of innovation in the restaurant tech sector these days. Our list is a tiny sliver of that innovation, showcasing what we believe are some of the most unique and intriguing companies shaking up and rethinking the restaurant business. Some of these companies will be at our upcoming Restaurant Tech Summit (make sure to get your ticket!), some we’ve written about recently, and some we are just getting to know.

It goes without saying, of course, that this isn’t an exhaustive list, and if you have a restaurant tech company you’d like to get on our radar, drop us a line anytime.

In no particular order, here are The Spoon’s Top 10 Restaurant Tech Companies:

Too Good to Go

When it comes to eliminating food waste, Too Good to Go was too good to not include on this list. The Denmark-based company partners with hotels, restaurants, supermarkets, and other businesses that have surplus food items at the end of each day and sells that food at a discount to consumers, who pick up the food at a designated time. Too Good to Go started in Europe, but raised $31 million and expanded into the U.S. this year. Businesses win because it turns leftover foods into revenue. Consumers win because they get good food at a discount. And the world at large wins because there is less food waste going into landfills. 

86 Repairs

You can’t run a restaurant without a fridge (or stove, or electricity), which means maintenance and repair management will always be relevant in the biz, no matter how many pandemics you throw at it. Chicago, Illinois-based 86 Repairs is leading a new generation of companies helping to make the management of maintenance and repair tasks a little less burdensome on restaurants. The platform digitizes information about all a restaurant’s equipment and coordinates troubleshooting, warranty checks, booking technicians, and other tasks. The idea is to give restaurants one central location at which to view all data about all maintenance, even for large, multi-unit chains with thousands of units.

Bite Ninja

The restaurant labor shortage will go down as one of the major issues — probably the major issue — restaurants faced in 2021. One of the most intriguing solutions to the issue comes from a company called Bite Ninja. In essence, the Bite Ninja platform lets restaurants outsource their staffing needs for the drive-thru lane to gig workers that take orders remotely. Drive-thru customers see a face on a screen and order as they would normally. They may not even know the person taking the order is probably sitting at their kitchen table instead of standing inside the restaurant. Bite Ninja’s founders say the platform can increase order accuracy and upsell rates for restaurants, while workers don’t actually have to report to a physical location to clock in. In the future, the tech will be available for more uses than just the drive-thru, including front-of-house kiosks, curbside pickup, and phone orders.

ConverseNow

ConverseNow currently creates conversational AI assistants for restaurant drive-thrus. In use at 750 restaurant locations in the U.S, ConverseNow says its AI achieves 85 percent order accruacy and bumps check sizes up by 25 percent. But ConverseNow is about so much more than just helping automate the drive-thru. The company wants its software to be the virtual plumbing for all of a restaurant’s digital ordering, connecting the drive-thru, mobile ordering, phones, kiosks and more. If it can achieve this, ConverseNow will convert many restaurant operators over to AI. 

Crave Collective

When The Spoon got a virtual tour last year of the Crave facility in Boise, Idaho that serves 16 virtual restaurant concepts, it felt like a look into the future of what restaurant/food delivery design could look in Metro areas. Not only were the physical attributes like a conveyor belt system that shuttled meals towards the front for delivery and a customer pick up area interesting, but Crave’s custom-built tech stack and in-house delivery drivers were indications that the company had built a facility and business model tailored towards the virtual brand era. The company wants to take it’s concept to four additional locations this year, and 10 by 2022.

Slice

While it’s easy to think most pizza restaurant shops are savvy at online ordering, the reality is that the typical independent sees only about one in five pizzas ordered online compared with three out of four for Dominos. Slice saw this as an opportunity and created a consumer app to help put independent pizza shops (16,000 of them so far) on solid digital footing to compete with the 800 pound gorillas in Dominos and Little Caesar’s. But what helped Slice make this list was their acquisition of POS startup InStore. Before Instore, Slice helped indies enter into the world of online ordering. Now, Slice Register (the POS based on Instore) enables the small guys to level up to the big guys and create a true multichannel pizza business with loyalty programs and integrated online/offline marketing programs.

Qu POS

The past decade saw restaurant point of sale move into the cloud and adapt features like pay-at-table and integrated online ordering, but the virtual brand explosion may be the biggest test yet for these systems. Qu POS is betting big on a virtual restaurant future with their KitchenUP platform, which acts as a lightweight operating system for ghost kitchen/virtual brands with unified management of multichannel order management, reporting, third-party delivery integration and other features built into an API-first architecture. FranklinJunction is utilizing KitchenUp across its network of 500 “host kitchens” to help power virtual concepts for such brands as Nathan’s and Frisch’s Big Boy.

Ordermark/NextBite

An arguably bigger trend than ghost kitchens this year has been restaurants finding and leveraging underutilized kitchen space in which to run delivery-only restaurant concepts. NextBite, a company created by restaurant tech company Ordermark, helps restaurants find that space and launch those concepts. The platform operates a number of virtual/delivery-only brands restaurants can add to their existing business and in the process make some incremental revenue. The company raised a whopping $120 million for this concept at the end of 2020, and has since launched more than 15 virtual brands in thousands of kitchens around the country. 

Manna

Look! Up in the sky! It’s your latte! Drone food delivery seems like sci-fi, but Manna is making it a reality right now. Earlier this year, the company was doing 50 to 100 drone deliveries a day and it’s prepping to launch service in a second Irish city. Though there are still regulatory hurdles to overcome, drone delivery could be a boon for restaurants because it delivers meals in minutes without needing to put a full-sized delivery car on the road. Drones are starting to take flight around the world, and Manna is helping the industry take flight. 

Delivery Hero

Delivery is table stakes at this point for the restaurant industry, but we pub Delivery Hero on this list because of all the big-name services out there today, it has one of the more noteworthy approaches to the concept. In addition to operating restaurant food delivery services around the world (via a bunch of different subsidiary brands), the Berlin, Germany-based company has also launched its own VC fund to foster food tech innovation, opened an education program to teach coding to underserved individuals, and, most recently, kicked off a new initiative to provide its restaurant partners with sustainable packaging. All these efforts point towards the possibility of a food delivery industry that’s not only faster and more efficient, but also more inclusive and sustainable.

Fee Caps, Mobile Apps, and More Recent Restaurant Tech News

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Here at The Spoon, we’re up to our elbows in prep-work for the upcoming Restaurant Tech Summit, which is right around the corner (August 17). The daylong virtual event will feature restaurant owners and managers, restaurant tech companies, investors, and many others sharing their thoughts on the digitization of the restaurant biz. 

In the meantime, there’s been plenty of news coming out of this sector that hints at what the digital restaurant of the future might look like. Here are a few notable pieces from the last week:

New York City’s commission fee cap gets extended to 2022.

NYC was one of the early cities to invoke a cap on the commission fees third-party delivery services like DoorDash and Grubhub could charge restaurants during the pandemic. The Big Apple currently requires those fees to be capped at 15 percent (normally fees can go up to 30 percent per transaction), and recently announced that lower number will remain in place for the rest of the year and on into next. The legislation was introduced along with four other bills aimed at third-party delivery, including one prohibiting non-partner restaurant listings and one forbidding services to charge for phone orders that didn’t lead to an actual transaction. 

All of this is a sign that City regulators are getting more involved with the doings of third-party delivery, which up to now have been largely unregulated and often controversial. San Francisco has already made fee caps permanent, and NYC doing so would further influence other cities. The pattern isn’t unlike the original fee caps introduced at the start of the pandemic: San Francisco was the first city to introduce them at the start of the COVID-19 pandemic. NYC quickly followed suite, trailed by most other major cities and dozens of mid-tier ones across the country. 

Homebase raises $71M for its restaurant team management platform.

Homebase, a SMB management platform, announced a Series C round of funding last week backed by a boatload of celebrity investors, including Matthew McConaughey and athletes Jrue and Lauren Holiday. The company will use the new funds to develop more digital tools for automating HR and payroll tasks.

While Homebase is not exclusively a restaurant tech platform, its focus on small, local business is beneficial to the thousands of independent restaurants out there that aren’t raking in billions thanks to their robust digital platforms. Homebase’s SaaS platform offers things like a digital schedule builder, a time clock that can integrate with POS systems, and payroll and hiring software. Working together, all of these small tasks have the potential to save time and therefore money, two things indie restaurants could use more of these days. 

Bluestone Lane launches a new app for all ordering channels.

A year ago, Austrailian-inspired cafe chain Bluestone Lane was touting its DIY mobile app thrown together quickly in response to the havoc COVID-19 was wreking on the restaurant industry. Fast forward to now, and the company chain has launched a new proprietary app that will process not just takeout orders but also those for dine-in and delivery.

The ability to process orders for off-premises and on-premises meals is unusual in the restaurant biz at the moment. Up to now, most mobile apps have been squarely focused on fulfilling delivery, pickup, and curbside orders — understandably, since those were the only channels available to consumers for more than a year. 

But even with dining rooms reopened, mobile ordering’s popularity continues to rise. Eventually, most mobile apps will likely service both off-premises meals and those eaten in the dining room. Bluestone Lane’s recent release gives us a glimpse into how those might function in the future. 

More Headlines

Gopuff Confirms Latest $1B Funding Round – The new money comes just months after Gopuff raised $1.5 billion, in March of this year. 

DoorDash Expands Its Ghost Kitchen Operation in California – DoorDash Kitchens San Jose will house six different restaurant concepts from both nationally known restaurants and those from the San Francisco Bay Area. 

Basil Street Using Equity Crowdfunding to Raise $20M for its Pizza Vending Machines – The pizza vending machine company recently announced that it is raising its Regulation A+ round of financing through equity crowdfunding. 

Delivery Hero’s Sustainable Packaging Program to Provide Restaurants With Eco-Friendly To-Go Containers

Delivery Hero today launched its Sustainable Packaging Program that gives restaurants on its platform more eco-friendly options for their to-go orders. The concept is currently piloting in Austria, Chile, Germany, Hong Kong, Hungary, Qatar, and Singapore. Delivery Hero said in today’s announcement that it will expand the program to other markets in the near future.

The company will deploy 10 million units of “sustainable packaging” by the end of 2022. Specifically, that means providing packaging that’s either fully plant based or plastic alternatives that are free of perfluoroalkoxy-alkanes (PFAS), the manmade chemicals frequently used to make grease- and liquid-resistant packaging. 

For its eco-friendly packaging, Delivery Hero is collaborating with Eco-Products and BIO-LUTIONS on various products including boxes, compartment containers, salad bowls, soup bowls, and sauce containers. (Delivery Hero invested in BIO-LUTIONS in 2019.) These will, according to the company, be available to restaurants on the Delivery Hero platform at “affordable pricing.” 

Several efforts over the last year or so have seen restaurants and restaurant-related companies address the industry’s packaging (aka trash) problem. Major QSRs like McDonald’s and Burger King have both piloted reusable container programs, while parts of the U.S. have companies like DeliverZero, which works with restaurants to bring reusable containers to the delivery process.

Delivery Hero’s news is notable because up to now, no major delivery service has announced plans to actually take over the responsibility of finding and providing eco-friendly packaging. Normally, this task is up to the restaurants themselves. Especially given the last year, many smaller businesses do not have access to affordable options that aren’t mainstream plastics. Delivery Hero, meanwhile, operates 13 subsidiaries, in addition to its name brand, all over the world, so its potential impact could be huge. Company co-founder and CEO Niklas Östberg said in a statement today that the Sustainable Packaging Program “aspires to pave the way for the industry and deliver a more climate friendly service for customers and communities around the world.”

The program follows the company’s earlier announcement of becoming carbon neutral by the end of 2021. 

If you want to learn more about Delivery Hero and other happenings in the restaurant world, join The Spoon on August 17 for a virtual Restaurant Tech Summit. The day-long event will discuss the digitization of the restaurant industry and what that means for its players. Grab a ticket here, and come ready to ask some questions.

DoorDash Expands to Japan

DoorDash today announced the official launch of its delivery service in Japan. This is the San Francisco-based company’s first foray into the Asia market, and its third international expansion after Canada and Australia. 

Service begins today in Sendai, a city with just over 1 million inhabitants in the northeastern part of Japan. The choice of location is in keeping with DoorDash’s strategy elsewhere, which is to focus on smaller cities and suburban markets over major metropolises. Historically, this has helped DoorDash reach customers normally outside most restaurants’ delivery ranges, and it’s arguably a factor that has kept DoorDash in the top spot for marketshare, at least here in the U.S.

Whether the company can repeat that success in Japan remains to be seen. Japan is a restaurant-dense country, which means plenty of prospective DoorDash merchants and customers. However, the country is also home to a lot of competition in the delivery space, including major services like Uber Eats and Delivery Hero.

DoorDash, meanwhile, has recently added services like grocery and convenience store delivery as a way of reaching new customer types and also standing out from the competition. (Uber also offers grocery delivery in some U.S. locations.) The company has not yet said if these services will be immediately part of its expansion to Japan. 

DoorDash went public at the end of 2020. Last month, the company reported revenues of $1.08 billion for the first quarter of 2021, up from $362 million in the previous year and beating out Wall Street estimates.

Restaurants in Sendai will also be able to use DoorDash’s Storefront feature, which lets businesses process orders and payments directly, rather than going through the marketplace. 

Delivery Has a Small But Vital Role When it Comes to Normalizing Cultivated Meat

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Setting aside scalability, price parity, and regulatory approvals for a moment, one of the major challenges for cultivated meat makers will be getting people to actually buy their products en masse and on a regular basis.

We’ve written before about restaurants being a critical step in this journey, and after this week, I would add restaurant delivery to that process, too. The industry-wide shift to delivery wrought by the pandemic forced the restaurant biz to get pretty creative in terms of what it can do with delivery. Similar energy could be put towards delivering consumers an entire education about cultivated meat, not just a meal in a box.

There’s currently only one company in the world that’s even allowed to sell cultivated meat in restaurants right now — Eat Just, which nabbed the first-ever regulatory approval to sell cultivated meat at the end of 2020 and subsequently started selling its GOOD chicken product at Singapore restaurant 1880. The San Francisco-based Eat Just has since struck a deal with Delivery Hero’s food panda service to deliver meals from 1880. This week, Eat Just announced (among other things) that it is doing something similar with JW Marriott Singapore South Beach’s Madame Fan restaurant. To start, GOOD chicken dishes will only be available from Madame Fan with delivery orders.

When I talked to Eat Just’s CEO Josh Tetrick this past week, he was admittedly a little more blasé about delivery than I’m being at the moment: “It just was kind of as simple as, ‘It’d be nice if people could eat meat without slaughter in their homes. So let’s do delivery.'” Delivery Hero happens to be an investor in Eat Just, and food panda happens to be one of Asia’s biggest delivery services. Those convenient factors made delivery something of a no-brainer for the company to pursue.

But Tetrick also pointed out that delivery is part of the overall process of getting cultivated meat out of the lab and onto our plates. “Start with regulatory approval,” he said. “Then it’s getting on a menu. Then it’s having a family sit down and have a chicken dinner together. Then you can go to a retailer and buy [it]. All these things create a context in which this idea of making meat — which seemed like it was some futuristic thing a year ago — suddenly becomes a way that people just eat meat.”

Restaurants have historically played a role in the evolution of what we eat. But thanks to the forces at work, both technological and pandemic-related, restaurants are no longer just in-person experiences between the four walls of a dining room. If there was one idea that’s been dissected ad infinitum over the last year, it’s that the word “restaurant” now encompasses a far wider range of experiences. One of the biggest is delivery.

The pandemic accelerated rather than created delivery’s popularity, which means as a meal format, it won’t go by the wayside anytime soon. Numbers may taper off a bit as the world reopens, but many consumers have already said they will continue to order delivery on a regular basis. That makes it an integral part of the restaurant industry that anyone looking to enter the biz needs to pay attention to. Like cultivated meat companies.

If we go by the example Eat Just/GOOD have set, that involves more than putting some lab-grown chicken bites in a cardboard box. Tetrick said that delivery for the Madam Fan deal will operate similar to what his company did with its original 1880/food panda deal. Customers can choose from a few different dishes (chicken and rice, katsu curry, etc.). Meals are delivered to customers along with a Google Cardboard viewer and a link to a 360-degree short film about meat. Tetrick described the film as follows:

“You you put the glasses on and you’re in the midst of a rain forest in South America. Then it transitions to the rain forests being removed, and you see that it’s connected to planting lots of soy and corn. And you see how the soy and corn is connected to feed going to animals, and you see how that’s connected to your plate and how we could do something different.”

The point is to help consumers familiarize themselves with the term “cultivated meat” and explain why it matters for the health of the plant (more food made with fewer resources) and how that big-picture context fits into each individual consumer’s life, whether they’re in Singapore or Tennessee.

Longer term, immersive experiences like the above could help with what’s something of an end game for cultivated meat: getting people to think of it as just meat. Not “lab-grown meat” or “slaughter-free” meat or any of the other descriptors floating around nowadays. Just regular ol’ meat from regular ol’ animals.

It’s significant, then, that Eat Just’s deal with Madame Fan will deliver cultivated meat that actually replaces its conventional counterpart on the menu. In future, says Tetrick, restaurant menus will still offer some plant-based options (for those who can’t eat animals for ethical and/or religious reasons). But in his mind, “it doesn’t make a whole lot of sense to have both cultivated meat and conventional meat on the menu.”

“I think you’ll end up having restaurants all across the world transition,” he added.

Not tomorrow, mind you. As I write this, global demand for meat is up. There is also a huge difference between letting someone taste something as a one-off experience and getting them to order it on a regular basis. As more companies attempt to scale up — often to the tune of hundreds of millions of dollars — they will need to start educating their prospective consumers on what the heck this stuff is and why we need it in the first place. Choosing the right restaurant partners and getting the actual chefs involved will be important for this, too, as well sending the right messaging to each different demographic.

Food delivery may be one small step in this process, but given its ubiquity right now, it’s a crucial one to get right.

Elsewhere in the Restaurant Biz . . .

Top Three Takeaways from Our Food Robotics Summit – The Spoon’s Chris Albrecht gives some thought to the future of robots, including restaurant robots, in his wrap-up from our latest event.

Take on Big Pizza by Supporting Bitcoin – An investor/entrepreneur has launched Bitcoin Pizza, a pop-up restaurant brand that will partner with independent pizza shops to deliver pies from May 22–29. Proceeds in part go towards supporting independent restaurants.

On-Demand Pay App DailyPay Raises $500M in Capital – The on-demand payment service for restaurants and retailers has secured $500 million in capital and will use it to expand to new markets.

Delivery Hero’s Tackling a Major Hurdle to More Diversity in Tech

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When Berlin, Germany-based Delivery Hero launched its recent Tech Academy recently, it showed us one way to create both more and better jobs in the restaurant industry — and make those available to a wider swath of the population. The question is, Will the Delivery Hero Tech Academy be successful enough to influence others in the increasingly tech-centric restaurant industry?

The Tech Academy will teach tech skills to “underrepresented groups” to promote more diversity and inclusion, and also give people more options when it comes to finding a job. To do this, Delivery Hero teamed up with the Digital Career Institute (DCI). Founded in 2016 in Berlin, DCI was originally launched as a way to help refugees get jobs in the tech world. (This was in the wake of the record 1.3 million asylum seekers that came to Europe in 2015.) The organization now operates four locations across Germany and works with over 600 companies to link DCI graduates to job opportunities. 

The Delivery Hero Tech Academy will teach coding languages (Java and Python are specifically called out), and the 9.5-months-long program is free to all participants. Those participants may also get an opportunity to move into a permanent position on a backend development team at Delivery Hero following the program. While that’s not a complete guarantee, participants presumably won’t be left out in the cold after graduation, either. DCI’s large network of partner companies will no doubt provide other potential opportunities.

A lack of diversity has long been a major problem in tech. Companies and leaders have made efforts in the form of diversity reports and pledges to do more, but critics have said these efforts will “ring hollow” until changes show up in diversity data.

At the same time, the restaurant industry is getting increasingly digitized thanks to the shift towards to-go orders (e.g., delivery) and digital ordering, payment, and management platforms. Theoretically, the switch could create not just more jobs in the industry but jobs that pay higher, are less dangerous, offer the kinds of challenges that make work fulfilling, and lead to new career opportunities down the line.

For many around the world, the above litany remains firmly out of reach. In fact, it’s more common for refugees, undocumented workers, and those with less formal education to wind up working the last mile of delivery. And if there’s one job type that’s the antithesis of safe, fulfilling work that pays well, it’s gig worker jobs like food delivery.

Restaurant tech companies have been saying for a couple years now that they don’t want their AI, automation, and robotic platforms to displace workers. Rather, they want that tech to take over the dirty, dangerous, and boring pieces of the restaurant so that human workers can focus on the proverbial “more meaningful” tasks. So far, few have defined what “meaningful” is in this technocentric restaurant world, or how one manages to acquire the skills to get there.

Until now, that is. By helping to provide he education needed to get into the tech part of restaurant tech, Delivery Hero is addressing an area that’s until now not really been talked about. Let’s hope the Tech Academy can start to change that, and inspire other restaurant tech companies to do the same.

More Headlines

Too Good To Go Expands Its Food Waste App Nationally Across the U.S.: The company announced its plans to expand service for its food-waste-fighting platform across the United States, following a successful program in select East Coast states.

Foodetective Raises $2M in Seed Funding: Switzerland-based Foodetective raised funds for its B2B software, which is an operations platform restaurants can use to organize and run their many disparate pieces of software and view them from a single dashboard.

Over Half of U.S. Consumers Are Comfortable Dining in Restaurants: More than half of U.S. consumers (60 percent), are comfortable with the idea of dining out at a restaurant, according to new data from tech intelligence firm Morning Consult. 

Delivery Hero’s Tech Academy Will Promote Diversity by Teaching Coding

As of today, Delivery Hero is taking applications to its newly launched Delivery Hero Tech Academy, which aims to promote more diversity and inclusion in the tech industry through education.   

Done in partnership with the Digital Career Institute (DCI), the program will teach coding languages (Java and Python are specifically called out) to “anyone who would like to learn how to code.” While anyone may apply, Delivery Hero specifically encourages “underrepresented groups” to apply.

The program itself will take place in Berlin and last 9.5 months. Seven of those months will be spent on curriculum, while the final stretch takes the form of an internship with one of Delivery Hero’s backend tech teams. Students may get the opportunity for a permanent position at Delivery Hero following the program (though it is not a guarantee).

For now, the program is open to those based in Berlin. Since Delivery Hero is funding the entire thing, those selected to participate pay nothing. 

There’s a growing need for opportunities that teach tech skills to wider swaths of the population. The robots may not have eaten up all the jobs yet, but automation is increasingly changing the nature of work, especially in the wake of the havoc brought by the Covid-19. Some estimates from economists have found that 42 percent of the jobs lost during the pandemic are gone forever, partly because companies are replacing humans with technology to keep costs lower. 

In the food delivery industry, specifically, we’ve long wondered when robots would take over the work of couriers and drivers, and to some degree that is already happening with autonomous delivery vehicles and the digitization of the restaurant back of house.

Delivery Hero’s Tech Academy offers one potential solution to these problems by providing individuals with new skillsets. Instead of these people getting elbowed out by tech, they are instead invited to participate in the inevitable changes facing the food delivery industry. 

The application period for the Delivery Hero Tech Academy runs from now until July 15.

 

Online Grocer Cropswap Launches New Feature to Help Food Insecure Families

“Farm-to-phone” grocery platform Cropswap today announced a partnership with Nourish LA to bring healthier food donations to underserved residents of Los Angeles.

Food insecurity, which the USDA defines as “the limited or uncertain availability of nutritionally adequate and safe foods, or limited or uncertain ability to acquire acceptable foods in socially acceptable ways,” has increased over the last year. Los Angeles county alone estimates that “nearly 1 in 4 residents” in that county has suffered food insecurity since the COVID-19 pandemic started. 

Cropswap, which launched during the pandemic, connects its users with local farmers via an app. In June of last year, the company also launched a subscription service through which customers can get delivery or pickup orders of produce, seeds, and other items on a regular basis. 

For the Nourish LA partnership, Cropswap as added an in-app donation feature that lets users give a seasonal Harvest Box to those in need for $50. The box is filled with organic produce from Sow a Heart Farm, in Fillmore, California, and contains what Cropswap says is enough to sustain a family for one week. Users can simply add the donation to their existing total. Cropswap and Nourish LA handle the actual process of getting the food to its recipients. 

Given that they’re a relatively easy way to encourage giving, in-app donation buttons have surfaced in multiple different areas of the food industry over the last twelve months. Uber Eats last year set up an in-app donation button to help struggling independent restaurants. Also last year, Delivery Hero partnered with the United Nation’s World Food Programme’s Share the Meal program. Users can donate a meal via the regular Delivery Hero app interface.

A $50 box of food is obviously more costly for the giver than, say, donating a few bucks or a single meal. However, online grocery has seen a surge in new users over the last year, and consumer enthusiasm for buying from local farms has also increased. Those two factors working together means there’s a much bigger potential audience for Cropswap’s self-proclaimed “Instacart for local produce.” That in turn means a wider pool of those able to and/or willing to donate a week’s worth of food to those in need.

Delivery Hero Launches its Own VC Fund, DX Ventures, to Invest Across Food Tech

Global food delivery service Delivery Hero announced today the official launch of its own venture capital fund that will invest in food, delivery, and other areas of the food industry. Called DX Ventures, the fund has a dedicated pool of long-term capital to devote to companies working in on-demand services, food tech, fintech, artificial intelligence, and logistics, according to a press release sent to The Spoon.

Duncan McIntyre, Managing Director of DX Ventures, said the fund was something Delivery Hero has been thinking about for a number of years, and that investments into other companies is a strong part of how the service has been built over the years. “We’ve made about $500 million [in] minority investments over the last couple years,” he told me over the phone recently. Out of the success of those investments came the next obvious step: formalizing the concept of Delivery Hero as an investor. Hence, DX Ventures.

The fund will start off with a focus on early-stage companies, such as those at Series A level. “The aim of the fund is to look at industries and areas that are going to be disruptive over the next 10 years,” McIntyre said. That could include food delivery, but it might also include adjacent areas, such as alternative proteins, packaging alternatives, or supply chain features.

He added that DX Ventures will also look for companies that compliment the core Delivery Hero platform. Delivery Hero, for example, has added grocery delivery to its list of services (see the company’s $360 million acquisition of InstaShop last year). McIntyre suggested that companies contributing to the grocery delivery sector might be appropriate candidates to receive investment from DX Ventures. Other examples might include companies that can improve the restaurant delivery experience by providing better tracking, shorter delivery windows, lower price points, or healthier food options. “There’s a lot of efficiency to be gained in the food system,” said McIntyre.

All of the above examples are hypothetical at this point, as DX Ventures has yet to announce any companies it is investing in. At the moment, the fund is actively looking for companies in which to invest over the long term.

Potential companies can be located anywhere geographically speaking, though the fund will also focus on markets where Delivery Hero already has a presence. At the moment, that includes no less than 50 countries across Asia, Europe, Latin America, the Middle East, and North Africa. 

DX Ventures will be independently managed from Delivery Hero.

Delivery Hero Gets Approval for the $4B Woowa Bros. Deal, Will Sell Its South Korea Business

Delivery Hero will sell its South Korea-based food delivery app Yogiyo as part of the conditions for getting regulatory approval on its $4 billion deal to buy Woowa Bros., which owns the country’s largest food delivery service Baedal Minjok. Final written approval on the deal is expected to happen in the first quarter of 2021, according to an official announcement from Delivery Hero.

The Korea Fair Trade Commission (KFTC) flagged the deal in November over concerns about its impact on competition in South Korea’s fast-growing food delivery space. Were Delivery Hero to hang onto Yogiyo, the combined user bases of that app plus Baedal Minjok’s would have given Delivery Hero 97 percent of the marketshare in South Korea. KFTC approved the Woowa Bros. deal on the condition that Delivery Hero offload the entirety of its own South Korea business.

Delivery Hero cofounder and Chief Executive said in a statement that his company was “deeply saddened by the required condition to divest Delivery Hero’s subsidiary.” However, Delivery Hero will nonetheless sell off Yogiyo within six months, per KFTC’s terms. 

Even with the requirement to sell 100 percent of its stake in Yogiyo, Berlin-based Delivery Hero will access a massive user base with the purchase of Woowa Bros.: roughly 15.8 million monthly active users, or 82 percent of the marketshare in South Korea.  

The South Korean food delivery market, meanwhile, is the world’s third largest, behind China and the U.S. Coupang Eats, backed by Softbank-owned e-commerce company Coupang, is the country’s third largest player, and will be Delivery Hero’s chief rival going forward.

Delivery Hero has six months from the time it gets written confirmation of regulators’ decision to complete the sale of Yogiyo.

The Delivery Hero-Woowa Bros. Merger Faces Antitrust Hurdles

The proposed $4 billion merger between Berlin, Germany-based Delivery Hero and South Korea’s Woowa Brothers now faces regulatory hurdles around antitrust concerns, according to The Korea Herald. Some South Korean lawmakers have gone as far as to request the deal get scrapped on the grounds that it is anti-competitive.

In response, South Korea’s antitrust watchdog, the Korea Fair Trade Commission (KFTC), said it would give permission for the deal on the condition that Delivery Hero offload its Yogiyo subsidiary. Yogiyo is South Korea’s second-largest food delivery service, after Woowa’s Baedal Minjok operation. The merger would give Delivery Hero an 87 percent stake in Woowa, and the combined user bases of the two would make up 98.7 percent of the entire restaurant food delivery market in South Korea. Needless to say, concerns abound about what this marketshare would do for competition in the fast-growing South Korean food delivery space.

The situation isn’t unique to Delivery Hero. Antitrust concerns plagued Amazon’s investment in Deliveroo for well over one year. One big reason that deal finally went through was the pandemic’s impact on the restaurant biz, which had a ripple effect on Deliveroo’s business. Similarly, Takeaway.com’s merger with Just Eat faced similar regulatory concerns, though it took far less time for that deal to go through than was the case with Amazon. Regulatory issues were one reason Uber Eats likely killed its ambitions to acquire Grubhub this past summer. The newly formed Just Eat Takeaway.com eventually won the Grubhub bidding war, and there is always a chance that deal could come under regulatory scrutiny before it goes through.

Delivery Hero made clear it will fight the KFTC’s conditions, with Reuters noting the service will “challenge” the recommendation and that Delivery Hero sees it as “a starting point for negotiations.” It will, however, slow the deal down in all likelihood.