Dive Brief:
- Lunchbox, a technology company that helps restaurants build their own digital ordering experiences, raised $50 million in series B funding, the company announced Tuesday. Investors include Coatue, Primary, 645 Ventures and executives from DoorDash, &pizza and Sweetgreen.
- Lunchbox will use the funding to add to its team and product suite, the latter of which includes web and app ordering, loyalty programs, channel marketing and branding and design help through Lunchbox Studio. The company also plans to pursue an acquisition, Restaurant Business reports.
- Lunchbox has traditionally positioned itself as an alternative to third-party delivery companies, and CEO Nabeel Alamgir has been critical of these platforms' commission fees in the past. The funding release touts that since 2020, the company has saved restaurants over $35 million that would have otherwise gone to third-party ordering companies.
Dive Insight:
The participation of DoorDash executives in this funding round reflects blurring lines between digital ordering and delivery fulfillment. This trend is driven in part by major aggregators lowering costs and making partner terms more flexible to better compete with platforms like Lunchbox.
Chains that use DoorDash's Drive product, for example, can process orders through native channels — including their own point-of-sale systems — collect customer data and still have deliveries fulfilled by DoorDash's driver network. The company also offers a Storefront product that provides operators with turnkey, branded online stores.
Still, Lunchbox still points to its differences from third-party business practices as valuable to restaurants.
"While other delivery platforms take a pound of flesh with delivery fees and gatekeep valuable customer data, Lunchbox's flat monthly fees and transparent data sharing, analysis and remarketing tools truly help restaurants grow their profits, not just their top line," Brad Svrluga, co-founder of Primary, said in the release.
The funding round suggests investors are confident digital ordering and delivery will remain key to restaurant success. It is also the latest n a bevy of investment rounds focused on restaurant technology as the industry continues to accelerate digital adoption. The NPD Group reports that digital orders placed through an app or website increased by 13% last year, on top of a 100% increase in 2020.
Last fall, Lunchbox snagged $20 million in funding after acquiring Spread, an online marketplace that connects restaurants with consumers, in August. Lunchbox also recently created a digital food hall with C3 where guests can order from multiple brands in a single transaction.
