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Daily news and analysis about the food tech revolution

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Ordermark Raises $18M in Series B Funding

Los Angeles, CA-based restaurant tech startup Ordermark announced today it has raised $18 million in Series B funding, according to Venture Beat. The round was led by Foundry Group, with participation from TenOneTen Ventures, Vertical Venture Partners, Mucker Capital, Act One Ventures, and Nosara Capital. The Series B round brings Ordermark’s total funding to $30.6 million.

Funds from the new round will go towards further integrating Ordermark’s service with other restaurant technologies, such as POS systems, kitchen display systems, and, of course, last-mile delivery companies.

Ordermark makes a hardware-software package that integrates and standardizes orders from disparate third-party systems like Uber Eats and Grubhub into a single dashboard. In the age of food delivery, it’s a noteworthy offering because it rids restaurants of the burden of having to juggle incoming orders off multiple tablet devices from third-party delivery services then input those orders into the main system.

The above scenario is often referred to as “tablet hell,” and it’s one restaurants have less and less patience for as demand for delivery increases and more restaurant-tech companies come to market promising solutions. Chowly is another such company that uses a tech platform to streamline orders from third-party delivery services. In a slightly different approach, Olo actually partners with third-party delivery services to help streamline the order process for restaurants. And with delivery apps predicted to hit 44 million U.S. users by 2020, the space is only going to get more competitive.

Ordermark closed a $9.5 million Series A round in September of 2018. The company counts TGI Friday’s, Buffalo Wild Wings, and Subway among its restaurant brand clients.

Food Tech News: New Olo Tablet Software, Baskin Robbins Non-Dairy Dessert and FluroSat Funding

Sure, our news round up is cool, but it’s not going to give you any relief if you’re in the middle of one of the global heatwaves. But it will make you smarter about food tech, so… there’s that.

Chill as best you can. And while you’re at it, catch up on a few more pieces of food tech news from the week:

Olo Releases New All-in-One Restaurant Tablet Software
Restaurant software company Olo announced the release of its new Expo tablet software, designed to help restaurants manage the entire digital ordering stream. The new tablet manages the entire flow of the order from direct and indirect channels, interfaces with third-party delivery services, and alerts restaurants to large orders. (press release)

Baskin-Robbins Scooping Up Non-Dairy Desserts
Not wanting to miss out on the plant-based craze sweeping the nation, Basin-Robbins will introduce two non-dairy dessert flavors next week. Non-Dairy Chocolate Chip Cookie Dough and Non-Dairy Chocolate Extreme are made from a base of coconut oil and almond butter. Sounds pretty sweet and we can’t wait to try it. (QSR Magazine)

FluroSat Raises $3.2M Seed Round
Microsoft’s M12 venture fund co-led the round for the Australian startup, which uses hyperspectral imaging to help predict disease in cotton and grain crops. Hyperspectral imaging uses light reflection, scanning and analysis to asses different qualities of foods. There are lots of startups using the technology in various applications throughout the food chain. (AgFunder News)

ShiftPixy’s Delivery Tech Promises Restaurant Chains More Brand Control

If the last year was was all about restaurants realizing they must do delivery, the next 12 months will be about how they’re doing it, and this question in particular: Do you go with a third-party service à la Uber Eats, or go it alone?

Those in favor of third-party delivery cite increased visibility, lower costs (you don’t have to hire your own driver fleet), and fewer technical responsibilities. Others say they will never use it because of the lack of control over service and brand integrity that happens when one signs on with a third-party service.

Over the phone last week, ShiftPixy cofounder and CEO Scott Absher seemed to agree with the latter argument: “How could a brand that has spent maybe billions of dollars over decades or generations to curate their brand suddenly surrender that brand and their customer experience and data to a kid in a red golf shirt and cap?” he asks.

He went into detail with me about how a restaurant’s choices no longer have to be the kid in the golf shirt or no delivery program at all. There’s a new middle ground afoot, and ShiftPixy is helping to establish it.

The Irvine, CA-based company makes a software stack for restaurants that was originally designed to help businesses combat high employee turnover. According to demos shared by ShiftPixy, when a restaurant signs up with the company, they are given access to a network of workers, called “Shifters.” The ShiftPixy app uses AI to rigorously onboard these Shifters, who undergo the same vetting any job candidate would, including background checks and providing proof of citizenship, driving records, and other details. Once approved, these Shifters become W-2 employees not of the restaurant but of ShiftPixy. When the restaurant needs to fill a shift, they can notify their network of nearby Shifters, who pick up work in much the same way Uber drivers pick up people to drive to the airport.

But Absher, who helped found the company in 2015, says ShiftPixy quickly became acquainted with what he calls the “dark side” of third-party food delivery: incorrect food orders, cold or poor-quality food, orders never arriving, and angry customers galore, to name a few. More importantly, users were getting frustrated with the brands themselves, though none of the ordering or fulfillment took place within a restaurant chain’s ecosystem.

“All of that anger was rolling back on those multi-unit operators,” he says, referring largely to national chains. But, he adds, these chains, “didn’t even know when a customer [was] angry so they could fix it.”

So ShiftPixy built a delivery component for its technology. For restaurants that use it, the ShiftPixy architecture works behind the scenes of a restaurant’s consumer-facing app to notify drivers of potential orders. This isn’t terribly different from the way any other third party operates the last mile of food delivery. It’s still a kid in a golf shirt picking your food up and dropping it at the door.

What is different is the slew of potential benefits restaurants — larger chains and their franchisees in particular — could reap from this arrangement. Through the deal they set with ShiftPixy, they’re not paying a fee on each and every delivery transaction made on a given day the way they would with Grubhub or Uber Eats. Most big-brand franchisees are locked into certain pricing structures and policies — having to choose a specific food distributor, for example — they can’t just dump to offset the cost of those fees. So a system that does away with them entirely could mean these restaurant operators reap the benefits of delivery without incurring the financial setbacks of working with traditional third-party services.

And while restaurants still can’t control what happens to the food when the driver picks it up, they can at least control the brand, and be aware of potential issues. When a restaurant uses ShiftPixy, customers don’t leave the brand ecosystem to order and pay for their meal, or to leave feedback or contact customer service. It all happens within the restaurant’s own mobile app, with ShiftPixy in the background, powering the last-mile logistics aspect. This, Absher reasons, could go a long way towards helping brands with their image. “The issue is brand integrity and the customer experience. As soon as that order goes out the door you’ve surrendered your customer experience,” he says.

This is a larger trend we’ll start to hear more about as delivery becomes, pardon the pun, baked into daily restaurant operations and more companies come to market with solutions aimed at national brands and their franchisees. Olo, whom Absher references during our talk, is another such company looking to help restaurants drive more delivery orders through their own in-house ecosystems and maintain more brand integrity in the process.

Absher can’t yet name these larger brands ShiftPixy is currently in talks with, though Denny’s and Carl’s Junior come up in conversation. He also says the company is “getting a lot of viral introductions” as franchisees jump onboard and encourage other nearby franchisees from the same brand to do likewise.

“When you talk to the operators, that’s where it really gets interesting,” he says. “There are a lot of mixed opinions about third party [delivery]. It’s a very confusing landscape. It looks to me like we’re entering the market at the right time in the midst of confusion. We’re hopefully being a source of help and clarity.”

Teriyaki Madness Expands Delivery Through Olo Partnership, Doubles-Down on In-House App

Fast-casual chain Teriyaki Madness announced this morning it has expanded its delivery program to include most major third-party services. The Denver, CO-based company has also inked a deal with Olo, whose technology makes working with multiple third-party delivery services easier, not to mention cheaper, for restaurants to handle.

For many restaurants — even national chains like Teriyaki Madness — the cost of doing delivery in house is too high to reach for now. Third-party services a la DoorDash, Postmates, and others may come with steep fees for restaurants and a certain amount of operational chaos, but they’re still the most economically viable delivery option at this point for many.

Dispatch, Olo’s main delivery product addresses some of those issues with third-party services by streamlining the order process. For one, it integrates all orders into a single ticket stream, regardless of where they come from. As we wrote in January, “Olo doesn’t compete with third-party delivery services; it more or less partners with them, so DoorDash or Grubhub orders placed via Olo go right into the regular queue of tickets, without an employee having to manually input them.”

For Teriyaki Madness, part of the reason behind the partnership with Olo is to drive more delivery orders through the chain’s website and in-house mobile app. As noted in the press release, by year’s end, the company would like to see an even split between orders placed in house and those placed with delivery services: “TMAD’s goal is to have 50 percent of digital orders come in through its app and the other 50 percent originate through third-party delivery vendors.”

In terms of realizing that goal, Olo is an appropriate match as a partner. In a blog post from March of 2019, Olo founder and CEO Noah Glass noted that his company’s goal “is to help our restaurants optimize for that future, and that means getting as many customers as they can to keep ordering directly through them, where they can have a profitable transaction.” That said, Olo isn’t the only restaurant-tech company working to make restaurant operators’ lives easier. Chowly, OrderOut, and Ordermark are all creating different versions of the same concept.

Olo’s system in particular also addresses those controversial commission fees third-party services charge restaurants. Rather than inking a direct deal with, say Uber Eats, then paying a fee per transaction, companies like Teriyaki Madness ink the deal with Olo, and costs owed to third parties are baked into to that deal. (It may slightly raise the delivery fee for the customer.) Teriyaki Madness noted that this process is especially good for franchisees: “The customer pays the delivery fee and the commission goes away, combatting profit erosion and ultimately protecting our franchisees’ bottom lines,” Michael Haith, CEO of Teriyaki Madness, said in the release.

Teriyaki Madness launched its mobile app in 2018 and has been rapidly expanding ever since. The chain has said it plans to double in size by the end of 2019, with delivery and pickup being a big part of those plans. Ensuring a more frictionless delivery process that’s also affordable for every unit in the chain, franchisees included, will be an important part of making that expansion a reality.

Olo Gets an $18M Investment to Save Restaurants From Tablet Hell

Digital ordering platform Olo announced today that it’s received an $18 million investment from NYC-based firm Tiger Global Investment. According to a release, the investment was structured using common equity.

Olo may not be a household name, but the NYC-based company has been around for what’s considered a long time in the world of restaurant technology. CEO Noah Glass founded it in 2005 as a pay-via-text service for feature phones. The iPhone, of course, was two years away from hitting stores, but once it and smartphones in general became the norm, Olo’s customer base mushroomed from 1 million in 2012 to 100 million in 2018. And in what could be a sign of these delivery-obsessed times for the restaurant industry, that 100 million orders processed in 2018 is the same amount Olo processed over the previous 12.5 years of its existence.

Olo’s digital ordering SaaS platform is specifically aimed at big brands with multiple (specifically, 10+) locations. Current customers include Denny’s, Which Wich, Five Guys, Jamba Juice, and Chipotle, to name just a few. The end-to-end system addresses everything from customer UI to POS integration to back-of-house management and menu management. Olo doesn’t compete with third-party delivery services; it more or less partners with them, so DoorDash or Grubhub orders placed via Olo go right into the regular queue of tickets, without an employee having to manually input them.

The latter is an especially important feature as restaurant chains attempt to juggle the process behind integrating disparate third-party orders into their regular ticket stream. Next time you’re in a major sit-down chain, glance around and see if you can spot the station for delivery tablets; it’s becoming an increasingly regular sight. That’s of course not the only benefit of Olo’s platform, but managing the growing number of sales channels is becoming increasingly difficult for restaurants, and the time is ripe for software that can fix that.

To that end Olo isn’t alone in its space. Chowly also does third-party integration, as does OrderOut, and Ordermark, who did a $3.1 million seed round in 2018.

Tiger Global, meanwhile, has made a lot of investments of late, including booze-delivery service Drizly, Checkmate, who also aims to simplify online ordering, and Toast’s end-to-end restaurant tech platform. All of which is to say that Olo has some serious work cut out if it wants to stay ahead of the competition another 12.5 years.

Ontray Provides Online Ordering and Delivery for Smaller Restaurants

A recent CNN Money headline read “Why Uber Eats and GrubHub partnerships are risky for restaurants.” The post lays out reasons for caution, including squeezing already tight restaurant margins with third-party delivery fees and increased chances of poor customer experiences with your brand (think: late delivery of lukewarm food).

The siren song of these alluring delivery services is enticing, especially considering the large audiences companies like Uber Eats and Grubhub have. In the fourth quarter of last year, GrubHub alone had 14.5 million “active diners” (a 77 percent year-over-year increase). And in the cutthroat world of the restaurant biz, you have to go where the customers are.

Ontray, a small Philadelphia-based startup, doesn’t want eateries to abandon services like GrubHub and Uber Eats. But it does return some of the power (and the purse) back to individual restaurants.

It does this with a SaaS-based tool that makes it easy for smaller restaurants to create their own websites, complete with online ordering and delivery capabilities. There’s no upfront cost for the restaurant; Ontray only charges a 5 percent commission on sales, which the restaurant can assume or charge to its customers.

Armed with their own site, restaurants can better claim their own SEO, and they aren’t driving repeat customers to an aggregator like GrubHub. If forced to go to a service like Uber Eats, a customer could be distracted by a different restaurant listed or even nudged into a restaurant owned by Uber.

Ontray Founder and CEO, Tyler Wiest, considers his company complimentary to delivery services. He thinks restaurants should take advantage of the big audiences GrubHub and Uber Eats provide, but those services should serve as springboards. Wiest suggests that when restaurants fulfill those outside delivery orders, they should include a coupon offering 10 percent off the next meal if it’s ordered directly through the restaurant’s site. In other words, a third party like GrubHub should become more of a marketing arm for a restaurant rather than an ongoing driver of business.

To broaden its reach, Ontray also partners with smaller, regional delivery services like Chow Caddie just outside of LA, and Catskills Delivery outside of NYC. These local services can do the leg work of reaching out and bringing neighborhood restaurants onto the Ontray platform.

While this moves Ontray in the right direction, Wiest’s company still faces competition from a number of bigger players like Olo, LevelUp and MonkeyMedia–all of whom offer tools to get restaurants online. Additionally, while Ontray-created sites are mobile friendly, they don’t yet offer restaurants the ability to create their own mobile apps.

While it’s great that Ontray wants to even the playing field for the little guy, targeting small businesses makes it more difficult for the startup to scale. The company isn’t venture backed as of yet, and Wiest, the only employee, has had to manage both the technical and business development side of his startup, which can put a strain on both.

Wiest remains undaunted, however. In an email he told me, “Ontray is primarily using online ordering to gain a foothold in both the restaurant and delivery industries. Using this foothold allows us to build an ecosystem facilitating interactions between not only restaurant and delivery providers but also marketing agencies, reservation application, ticket management / POS systems etc..” He sees Ontray becoming the glue that brings together any system the restaurant wants to use to facilitate order and delivery.

Until then, however, restaurants looking to get online can give Ontray a try. Since there’s no upfront cost, that relationship probably isn’t terribly risky.