Dive Brief:

• ChowNow has laid off almost 100 people across various teams, including onboarding, operations and sales, the company confirmed. TechCrunch first reported the news on Wednesday. 
• “We have had to make the difficult decision to lay off team members this week. We are deeply grateful for their contributions and they will receive our full support during this time of transition,” ChowNow said in an emailed statement. “These actions are never taken lightly, but we believe they are necessary in order to ensure the long-term sustainability of the company and our commitment to supporting local restaurants.”
• ChowNow joins a fast-growing list of restaurant tech startups, including Sunday, Nextbite and Reef, that were flush with capital last year but have recently announced layoffs.

Dive Insight:

Restaurant tech industry layoffs are part of a larger trend in the tech space as companies prepare for what could be an economic downturn or recession in 2023. But if restaurant-focused firms dial back operations or shut down, it could leave operators scrambling for new vendors to maintain operational efficiencies, connection with diners through online orders and streamlined point-of-sales processes. 

“We've been very fortunate, given the last few years of the pandemic, that the business was in the right place at the right time [and has] grown very quickly. And this week, and this month, we've obviously made some changes. And now the team is roughly the size of where it was last year,” ChowNow CEO Chris Webb said. 

Webb said that the recent spike in layoffs, both within the restaurant tech industry and beyond, reflects that companies are bracing themselves for an economic blow. 

“Typically when you see rounds of layoffs from companies across industries en masse, like you’re seeing now, it’s usually tied to a massive slowdown or some type of massive global impact, or at least impact in the U.S. economy,” Webb said. “This summer, all of these companies — us being one of them — have decided to really focus on our costs. Not because our businesses are slowing down, but I think everyone is very nervous about what seems to be a storm out in the distance.”

ChowNow — which launched in 2010 to help small restaurants without an online presence offer delivery and pickup — has been expanding its offerings to meet the needs of operators and diners who have become increasingly reliant on restaurant technology. The platform launched commission-free order via Instagram in 2020 and a partnership with Google for online orders in 2019.

Last year, it launched its Order Better Network. The platform gives its restaurant clients access to various ordering channels, which include OpenTable, Seated and Yelp, allowing operators to more easily create digital storefronts across the internet. Customers can use these platforms to browse, order and checkout without exiting. The company previously said this offering has helped grow online sales by an average of 30%. 

The company also partnered with Cartwheel, an on-demand delivery management platform for retailers and restaurants, in March, allowing Cartwheel to expand its hybrid delivery offering to small and midsize businesses. 

ChowNow has raised $64 million after nine funding rounds as of 2019, according to CrunchBase. As of May 2019, its valuation was in the range of $100 million to $500 million.