Yum! Brands has begun the process of acquiring Dragontail Systems, the two companies announced today. Under the agreement, the Louisville, Kentucky-based Yum! will pay $93.5 million in cash for all the share capital of Dragontail, which is publicly traded on the Australian Securities Exchange. Dragontail Systems had raised $8.8 million in funding.
If successfully completed, the addition of Dragontail will bolster Yum! Brands’ delivery capabilities. Dragontail makes Algo, an AI-based restaurant workflow management system. Algo processes a restaurant’s incoming orders and manages when each item should be cooked in coordination with when a delivery driver will arrive.
In addition to managing kitchen workflow, Dragontail has introduced additional technologies to its stack over the past couple of years that augment and expand a restaurant’s delivery capabilities. Dragontail’s AI-based camera can be installed in kitchens for quality control. In addition to ensuring that pizzas are topped and cooked properly, they also were a means of communicating with the customer: Here’s a picture of your pizza! During the COVID pandemic last year, the camera was also used to check on sanitation conditions in kitchen workstations.
More recently, Dragontail integrated drone delivery into its automated workflow. The company is doing drone pizza delivery with Pizza Hut in Israel, and announced a partnership with Valqari, which makes smart lockers for drone delivery.
According to today’s press announcement, Dragontail’s technology is being used in 1,500 Pizza Hut restaurants in more than 10 countries. Yum! didn’t mention rival Domino’s, which has also used Dragontail’s solution in the past. When we checked in with Dragontail of April last year, it said its technology was being used in more than 2,500 stores (the number of Domino’s stores was not specified).
The acquisition comes at a time when takeout and delivery is more important than ever to the restaurant industry. With dine-in operations for many restaurants shut down last year, people have become accustomed to having food from any type of restaurant delivered to their door. In addition to Pizza Hut, Yum! also operates KFC, Taco Bell and Habit Burger. Both KFC and Taco Bell are placing more of an emphasis on to-go orders at their restaurants. It’s not hard to envision Dragontail’s technology being used not only to help coordinate delivery, but also with a brand’s mobile app to facilitate faster ordering and pickup via drive-thrus.
Yum! Brands acquisition of Dragontail still needs to meet Australian regulatory approval. In its press release, Yum! Brands said that it estimates the acquisition will have “an immaterial impact to its 2021 financial results.”
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