Dive Brief:

• Chipotle has invested in Nuro as part of the autonomous delivery company's Series C funding round, marking the restaurant's first significant investment in a third-party technology company since CEO Brian Niccol took the helm in 2018, according to the press release.
• The fast casual chain has made early investment in digital technology such as digital kitchens and Chipotlanes, and is now exploring "disruptive opportunities outside of traditional third-party relationships," per the press release.
• Chipotle's digital segment is becoming a big business for the chain, growing 174% and reaching $2.8 billion in sales 2020. As such, the chain has been exploring new ways to reach customers, including a Facebook bot named Pepper and its first delivery-only restaurant.

​Dive Insight:

While Chipotle has been offering third-party delivery for a few years, this new investment could indicate an interest in a self-delivery method, which could help cut costs. In 2020, delivery costs were up with the growth of the channel, which made up almost a quarter of sales, Chipotle CFO Jack Hartung said during the company's Q4 2020 earnings call. To improve those economics, the company implemented delivery menu price differentials with a weighted average of about 13%.  

"We are always seeking opportunities that provide innovative solutions for increasing access and convenience for our guests," Curt Garner, Chipotle's chief technology officer, said in the release. "Nuro could change the traditional delivery model and we believe consumers are going to continue to seek options and additional access points for how and where they enjoy their food."

Autonomous delivery has been tested by the likes of DoorDash and Uber Eats and offered in select markets by Postmates, but isn't widely available. Pre-pandemic, autonomous deliveries were also becoming a growing part of college campus life with Starship Technologies and Kiwibot delivering across various universities. The robots Postmates has been using in Los Angeles can help decrease the cost of small orders, but Nuro's vehicles have a larger capacity and are closer to the size of a traditional compact car, allowing  Nuro to deliver more than one small order at a time. While Nuro has been doing tests with grocery companies and drugstores, it has experience with restaurant delivery, partnering with Domino's in 2019.

Chipotle joins a growing list of restaurant chains investing in technology companies over the last two years. McDonald's started the trend in 2019 when it bought Dynamic Yield for $300 million and artificial intelligence company Apprente. Yum Brands has been on a bit of a buying spree this year, acquiring marketing technology and omnichannel solutions company Tictuk Technologies and the AI portion of marketing firm Kvantum.