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Daily news and analysis about the food tech revolution

Kiwibot

Is Kiwibot’s Sale & Leaseback Deal a Way For Food Tech Startups to Traverse the Venture Capital Winter?

Interesting bit of news today from sidewalk delivery robot startup Kiwibot: The company announced it has signed a $10 million financing deal in the form of a sale and leaseback arrangement with Kineo Finance, an asset financing company based in Switzerland.

According to company founder Felipe Chavez, the deal is structured such that Kineo will make up to $10 million available in financing to Kiwibot, and in return, Fineo will buy the robots built by Kiwi at cost and lease them back to the company. This arrangement enables Kiwi to have ready access to growth capital to build its robots and also limits the equity dilution of a typical growth-round investment.

 “It is a straightforward sale and leaseback,” Chavez told Tech Funding News. “Once we manufacture them and ship the robots to their final destination, we sell them to Kineo at cost.”

While this is the first time that I’ve seen this type of capital agreement in the food robotics space, it could be a sign of things to come. As we’ve seen from this month’s news from Picnic, the food tech hardware market is having challenges as more traditional venture investor appetites for large growth rounds have shrunk in the current uncertain economic environment. By using a sales and leaseback deal, startups can get access to a whole new type of financing and also limit how much of their company they need to give up in the process.

Of course, there are also downsides to these types of arrangements. Kiwi has to make sure they can find customers for their leased robots, as they’ll now have a monthly payment to service for the robots in the field. Kineo owns the robots and if Kiwibot can’t make the payments, the financing company can do whatever they want with them. Add in other complicating factors like the loss of tax benefits such as asset depreciation, and the conversation about whether to adopt this new model becomes somewhat nuanced.

That said, I applaud Kiwi for finding a new and creative way to fund their expansion, and I have to think other food robotics vendors might be taking a look at this type of financing arrangement.

Food Robot Roundup: Delivery Bots Explore New Areas, Yum China’s Robot-Powered Expansion

It’s been a busy few weeks for restaurant robots. In this edition of the food robot roundup, we’ve got updates on the expanding map for a couple of food delivery bots, Jamba & Blendid’s growing relationship, Yum China’s increasing reliance on robots, and more.

Let’s get to it.

Coco delivery bot expands beyond California

Coco has spread its wings. The food delivery robot startup has expanded to Austin, Texas, the first city outside of its home state of California. This expansion is thanks in part to the Series A funding round of $36 million that it raised last August. Coco launches with ten partners in Austin, including Arpeggio Grill, Bamboo Bistro, Clay Pit, DeSano Pizzeria, Tuk Tuk Thai, and Aviator Pizza.

Coco makes a four-wheeled, cooler-sized robot that delivers food and beverages. Coco prepositions its robot at merchant locations in dense city environments and advertises that it completes deliveries in 30 minutes or less. The company has indicated Austin is only its first stop in Texas as it has plans to expand to other cities in the Lonestar state.

Kiwibot, another robot delivery service, announced that they’ve raised $7.5M pre-series A funding and closed an expansion deal with Sodexo, a food services and facilities management company. They currently have 200 robots operating in 10 campuses and are on track to expand to 1200 robots and 50 locations by the end of 2022. 

Kiwibot, which was founded at the University of California, Berkeley, has long-targeted college campuses, ideal locations for food delivery robots with their dense populations of hungry college students, and protected pedestrian walkways. Besides the slew of robots making deliveries on campuses, consumer-facing food kiosks (more on that later) and autonomous retail shopping have also been moving in.

Jamba and Blendid expand to two more campuses

Jamba and Blendid have expanded their reach to two more college campuses, Georgia College and Kennesaw State University. The co-branded Jamba by Blendid smoothie kiosks offer a quick and convenient way to pick up a healthy smoothie and will be located in each school’s student union. 

University campuses are a great way for Jamba by Blendid to tap into a market that is open to using technology and usually doesn’t have easy access to healthy food like smoothies. Blendid has plans to expand its kiosks into other locations such as gyms, hospitals, and airports, which means the company will need to adapt to different customer buying behavior and preferences. At universities, Blendid offers flavors of the week or theme-based drinks to keep students engaged and coming back. 

Hyphen Raises $24 Million Series A

Hyphen, a startup that automates the back-of-house food assembly for restaurants, just announced a $24m Series A funding round led by Tiger Global.

The company’s flagship product is the Makeline, a modular robotic food assembly line. Workers focus on taking the orders and the machine combines ingredients and can generate 350+ meals per hour. KitchenOS, the software powering the Makeline, utilizes data from the robotic assembly line and other inputs to optimize workflows, recipe development, and food scheduling. 

Hyphen’s modular system means that restaurants can add or take away modules and choose ones that precisely fit their needs, such as dispensing, reheating, and mixing. According to company CEO Stephen Klein, the company currently has 11 customers who have pre-ordered the Makeline.

You can catch the Spoon’s interview with Hyphen’s CEO and co-founder Stephen Klein here. 

Yum China expands stores without workers

Image credit: Associated Press

Yum China, a Chinese restaurant group that spun off from U.S. parent Yum Brands in 2016, has expanded its number of stores while keeping its labor force the same, in part by increased use of AI and robotics. The group operates restaurants such as KFC, Pizza Hut, and Taco Bell and has increased the number of stores by 56% from 7,652 in 2016 to 11,788 in 2021. However, the company has kept the same number of employees during the same period at 420,000 full and part-time staff. 

Yum China has managed this by leveraging a variety of restaurant technology. The company has installed touch screen panels to automate the ordering process and has installed robots in its KFC to serve soft-serve ice cream in several Chinese cities. Yum has installed digital lockers store takeout orders in other locations.

Yum China’s increased reliance on automation is just one sign of the rapid adoption of restaurant technology adoption in the Chinese fast food sector. Other examples include this restaurant in Foshan, a city in Guangdong’s southern province, where a robot prepares and serves fast food dishes. Robotic arms prepare the food and then robot waiters and a conveyor-belt system deliver the food.

In case you missed it, I discussed cultural differences in openness to technology adoption in the last roundup, where I discussed the robots serving food to Olympians in Beijing. It’ll be interesting to see if the high profile of robots at the Olympics will lead to more acceptance of food robots in the United States or more hesitation.

Kiwibot Launches V4.0 of its Delivery Robot, Partners with Knight Foundation, Chick-fil-A and Segway

Robot delivery startup Kiwibot is holding an online keynote this morning to announce the newest version of its semi-autonomous rover bot, as well as new partnerships with the Knight Foundation, Chick-fil-A and Segway.

We’ll be attending the virtual conference and will fill in more details aftewards, but here is what the company has shared with The Spoon ahead of time.

Kiwibot says that its robots have already completed more than 150,000 food deliveries. The company recently started making deliveries in Santa Monica, CA and through its relationship with Shopfiy, will be expanding across Los Angeles, San Jose, Miami, Pittsburg, and Detroit.

Version 4.0 of its robot has a whole new set of on-board cameras, lights and speakers. The Level-3 autonomous robots are equipped with sensors to detect people, traffic lights, and vehicles and are remotely supported by human teleoperators.

Kiwibot also appears to be broadening into indoor food delivery. The company said that food and drinks can be ordered through local businesses using Shopify web portals and deliveries can be made on city streets, college campuses, malls and airports. The robots will make deliveries up to a mile away, taking roughly 30 minutes and costing $1.99 per delivery.

Kiwibot has also entered into a manufacturing agreement with Segway, and, separately, will begin piloting a delivery program with Chick-fil-A. Specifics about each of these programs such as manufacturing scale or the size of the Chick-fil-A pilot were not provided ahead of time.

Again, this post will be updated with more details following Kiwibot’s press conference this morning.

College: the Next Big Frontier for Ghost Kitchens

New bits over the last couple weeks have sent my brain right back to college — specifically to the college dining hall, where myself and others (everyone) used to steal food to take back to our dorms to eat between meals.

OK, I’m not sure that actually classified as stealing, since we were all on prepaid meal plans. But you weren’t allowed to take food out of the dining room, so the act of sneaking, say, a couple oranges and a jumbo ziploc bag of cereal out the door was practically an art form among the student body population.

Gen Z will likely not have to jump through that particular hoop when it comes to getting fed in between regular mealtimes. I was recently reminded of this possibility when news dropped that foodservice provider Chartwells plans to launch a ghost kitchen program across the colleges and universities it supplies.   

Chartwells has already piloted the program at a few schools, including the University of Utah and Seattle University. The idea is to find underutilized kitchen spaces on campus and turn them into ghost kitchens that serve students delivery and pickup meals ordered via the Chartwell’s mobile app.

While the long-term relevance of ghost kitchens is still a hotly debated topic in the the wider restaurant industry, the format seems to be a no-brainer for school campuses. 

As my food-theft story above anecdotally illustrates, students eat at all hours of the day and night, and often those weird hours are out of necessity (e.g., studying late, extracurricular commitments, etc.) Campus dining halls rarely accommodate those hours. Nowadays that leaves students at the mercy of DoorDash or Uber Eats, which, particularly with the newly hiked fees, gets expensive quickly. There’s always, of course, the option to hop in the car and hit the drive-thru, but that takes time and, depending on the restaurant, costs a fair amount of money, too.

Instead of leaving students to the mercy of surrounding restaurants, schools have an opportunity to work with their foodservice providers and offer meals in a wider variety of formats at more times throughout the day and night. The kitchen infrastructure already exists, most notably at dining halls that only operate at specific hours. Those spaces could easily double as kitchens that fulfill pickup and/or delivery orders in the off hours. Schools might even make money off such an operation. 

Meals, meanwhile, could count towards a student’s overall meal plan, and adding a mobile app component, as Chartwells has done, would simplify the entire process. Another approach would be for a school foodservice provider to partner with a third-party mobile app company, as Aramark did with Good Uncle in 2019. Via the Good Uncle app, students at participating schools can browse meals and order them for delivery. The app’s “Flexcash” system is a declining balance that can be re-upped by the student (or their parent) at any time. From there, it functions just as a meal card for the dining hall would.

Food robots, of the small, six-wheeled variety, could also prove themselves a valuable part of the campus ghost kitchen operation. Companies like Starship and Kiwibot can already be found roving about multiple university campuses. In fact, both companies have existing partnerships with yet-another foodservice provider, Sodexo. One can easily imagine one of these roving bots carrying food from an on-campus ghost kitchen to the student’s dormitory or to a centralized pickup point on campus.

A final point in favor of ghost kitchens on campus. We hear often that delivery and takeout can’t replace the restaurant experience, which is true, because eating soggy fries from a cardboard box is decidedly not an experience. But campus dining halls aren’t exactly known for five-star meals, and much of the food served up in these places is already well-suited to travel. There may even be room for improvements in menu offerings, something Chartwells appears to be looking at through its program.

Does all this potential for ghost kitchens, tech, and the like spell the death of the campus dining room? Not likely. In fact, this particular on-premises format is ripe for its own digital reinvention, from automat-style lockers to robot vending machines and even tools in the back of house that can better monitor food safety and food waste. All said and done, there’s arguably enough room for innovation within format as there is beyond it.

Food Tech ‘Round the Web

Meanwhile, over in the regular restaurant world, ghost kitchens are not the future, according to this thoughtful analysis from Grubstreet writer Rachel Sugar.

Also, forget Guy Fieri. White Castle is opening a delivery-only kitchen in downtown Orlando, Florida, which will be in operation next week.

And if you read nothing else in this newsletter, check Eater’s comprehensive coverage on how to help feed those impacted by the Texas winter storms.

Kiwibot will Pick up and Deliver Pizza from Piestro’s Robot Vending Machine

Human-free, contactless delivery is going next-level, thanks to a new partnership announced today between Piestro and Kiwibot.

In a word, this new deal is all about robots. Piestro makes a robot-powered pizza making vending machine , and Kiwibot makes little rover-style food delivery robots. As Piestros come to market, they will feature an integrated mechanism that allows Kiwibots to pluck those pizzas from the machine and cart them directly to your door.

The program isn’t live yet, and there isn’t a specific timetable for when it will happen. Piestro just successfully closed one equity crowdfunding campaign that raised more than $1 million, and is launching a new one with the hopes of raising $5 million more.

But when Piestros do come to market, those living in a Piestro/Kiwibot market will be able to order a pizza from the comfort of your couch through an app, and the Kiwibot will retrieve it and bring it to you. The exact process/app through which you order depends on if the Piestro is one owned and operated by the company, or if it is one that’s branded and licensed by a third-party.

Given the global pandemic, the desire for contactless food delivery is accelerating technologies that power both robotic vending machines and robot delivery services. Not only can robots work around the clock, they also remove a vector of human-to-human transmission. The Piestro/Kiwibot deal takes this concept even further by having a robot interact with the machine so there is no human in the transaction.

The ability to get items from vending machines was a feature that Kiwibot added last year, though being able to hold a boxed 12-inch pizza requires more space than picking up a Snickers bar. I spoke with Massimo de Marco, Piestro CEO by phone this week, who explained that Piestro is working with Kiwibot on a new version of its robot that can carry pizzas.

As noted, there wasn’t any indication of when or where Piestros will be hitting the streets. And even though Piestro and Kiwibot are the first to announce such a daisy chain of robot delivery, you can bet that similar deals will soon follow.

Updated: Kiwibot Partners with Sodexo to Roll Out Delivery Robots at the University of Denver

UPDATE: Some details of this story changed after we published this story:

  • The service is now launching in October. 
  • The delivery fee will start at $2.50, or it will be free with a monthly subscription.
  • Delivery will be available from a total of three restaurants.

Original post follows:

Kiwibot announced today that it has partnered with foodservice company Sodexo to bring robot food delivery to students, faculty and staff at the University of Denver.

Starting today, a fleet of 15 Kiwibots will be available to deliver food from Monday to Friday between the hours of 8 a.m and 6 p.m., with deliveries costing a flat $2.50 per order. Delivery will start with one campus restaurant before expanding to four more food options by mid-October. Kiwibot is also working with the city of Denver to enable off-campus deliveries at some point in October, as well.

There are a few things worth noting about this deal. First, this is Kiwi’s second bite at the apple when it comes to college delivery. Last year, the company delivered to UC Berkeley and had big plans to expand to a number of different schools across the U.S. Those plans never came to fruition, however and were abandoned. One reason that growth might not have happened last year was that Kiwibot was going through student groups, and not partnering with a school’s administration.

This time around, Kiwibot has partnered with Sodexo, a huge company that provides foodservice to colleges across the U.S. This partnership brings with it more legitimacy for Kiwibot, and also provides an entrée, so to speak, with college administrations and restaurants at potential campuses.

That Kiwibot has partnered with Sodexo is in itself interesting because Sodexo has an existing partnership with Kiwi rival, Starship, for robot deliveries on various colleges like George Mason University. The difference, however, is that Starship’s program requires users to download the Starship app. Kiwibot’s solution is more of a B2B play, and will integrate with a food ordering app from Sodexo. So it could provide Kiwibot with direct access to a greater number of Sodexo-run properties, should the partnership grow.

Kiwibot have been on a bit of a, err, roll lately. In July the company launched a restaurant delivery program in the city of San Jose, CA. Kiwibot is also in the middle of an equity crowdfunding campaign, which aims to raise $1 million.

Kiwibot Launches Equity Crowdfunding Campaign for its Deliver Robot Service

Kiwibot, which makes rover delivery robots, officially announced its equity crowdfunding campaign today, with the goal of raising a little more than $1 million via Wefunder.

As of this writing, the company had raised more than $150,000 of that goal (the company raised $148,000 before officially launching). Those interested, can invest a minimum of $100 in the company. (I’m not a financial advisor, all investments have associated risks, caveat emptor, and all that.)

Kiwibot’s financing move comes just weeks after the company rolled out its delivery robots on the streets of San Jose, CA. The company partnered with the City of San Jose, integrating with its municipal software systems to help better manage the fleet of robots and alleviate any hiccups that might occur (like a bot getting stuck on a street corner or something).

Indeed, Kiwibot lists regulatory hurdles as a risk for potential investors, saying:

Due to the actions of some of our competitors, delivery bots have proved controversial in some regulatory environments with some cities, like San Francisco, putting out laws that make it difficult for us to deploy. If this became widespread we would have trouble going to market.

As part of its filings on the WeFunder site, Kiwibot also published its finanials. The company says it generated more than $279,302 in 2019, with losses of -$2,621,693 during that year. Kiwibot says it has $232,562 in cash. According to Crunchbase, Kiwibot has previously raised $3.5 million in funding.

Equity crowdfunding has become a popular option for robotics companies. Miso Robotics, Small Robot and Piestro are all robotics companies that have run equity crowdfunding campaigns this year (both Small Robot and Piestro have met their goals).

Kiwibot’s timing with equity crowdfunding could be fortuitous. Delivery robots like Kiwi’s could be playing more of starring role in how people get their meals as restaurants and consumers look to reduce human-to-human contact. Robots don’t get sick and don’t cough all over your food.

The question now is whether Kiwi’s funding case is compelling enough for the crowd to deliver.

Kiwi Unveils New Name and a New Robot (That Can Get Food From Vending Machines!)

Words matter. That’s a lesson I hope robot delivery startup learned earlier this week when it sent out an email saying “We want to let you know that we will be ending the Kiwibot delivery service, effective December 15, 2019.“

We weren’t sure exactly what that meant, and after a full day of confusion and multiple explanatory emails from the company, it turns out it wasn’t the END end for Kiwi. It was just stopping service for the winter. (Sidenote: Don’t skimp on a copywriter.)

The company then said it would be announcing its reinvention yesterday, which it did towards the close of business with a corporate blog post. Kiwi had already shared some details from this “reinvention” earlier in the week: the company has changed its name to “Kiwibot,” there’s a new, more rugged robot on the way (see video below), and something called Kiwi Express promises to be the “First end to end robotic Food delivery service.”

Yesterday’s blog post added a few details:

In 2020, we will roll out Kiwibot Cloud Pro. A new generation is coming. Refined hardware design, new operations features, and superior human interactions will transform the logistics landscape and yield better service.

We combine sensors of a custom made stereo camera to get more information about the environment. Our Kiwibots will sense the world more accurately and move more precisely. Our Kiwibots are now resilient to dynamic light conditions on different sidewalks.

Kiwibot v3.2 | Nuestro robot más avanzado

In addition to the new technology, this new Kiwibot is also more rugged, which will make it less likely to get stuck (and need a human’s help).

On Kiwibot’s website, the company says that its robots can now interact with vending machines. At first blush, this might seem like overkill to have a robot pick you up a Snickers bar from the lobby vending machine because you are too lazy to walk down there. But vending machines are changing and turning into something more akin to small restaurants. Companies like Yo-Kai Express serve hot ramen from vending machines, and Cafe X is re-classifying its coffee robot as a vending machine. So being early to integrate its robot with those types of systems now makes a lot of sense for Kiwi.

It’s nice to know that Kiwi isn’t shutting down. While there are still a lot of issues to work out, I’m still a big believer in robot delivery. More players in the space means more competition and more innovation.

Now Kiwi just needs fewer wording mistakes.