Dive Brief:
- Presto Automation is reducing its global full-time workforce by about 17% as part of a strategy to reduce costs, bolster profitability and streamline operations, the company said in a Friday press release.
- As of June 30, Presto had 137 full-time employees, meaning around two dozen employees have likely been let go.
- The company, which offers automation and artificial intelligence technology to restaurants, said this reduction will lead to a decrease of monthly expenses of $400,000, rising to roughly $1.2 million after about eight months.
Dive Insight:
Several other restaurant tech companies have reduced their workforces this year, including Olo and Grubhub, and Nextbite sold itself to C3 months after it issued layoffs. These companies continue to battle losses and are looking for solutions to reign in rising costs.
In addition to the cost reductions, Presto also entered into agreements with Remus Capital-affiliated syndicate of investors to sell 7 million shares of common stock that would result in proceeds of about $7 million. As part of this agreement, Remus appointed two members to Presto’s board: Tewfik Cassis, the first investor of Presto, and Sasha Hoffman, another individual Presto investor.
This capital is in addition to $3 million previously invested by Cleveland Avenue, a company founded by former McDonald’s CEO Don Thompson.
“This funding, along with our efficiency initiatives, will enable us to continue leaning into the growth we are experiencing in our Presto Voice AI platform and will support our ability to maximize shareholder value with Presto Touch,” Xavier Casanova, Presto CEO, said in a statement. “We recently announced we have $17M of revenue opportunity at franchisee customers that are part of restaurant groups with signed MSAs or pilots and $100M of revenue opportunity at brands with signed MSAs or pilots; we intend to use this capital toward capturing that opportunity.”
Presto reported a net loss of $34 million for its fiscal year ending June 30, 2023, an improvement from a net loss of $56 million in the year-ago period, according to an SEC filing. Revenue also declined by 14% to $26.1 million during the year compared to $30.4 million for the year ending June 30, 2022. Despite the decline in revenue, the company has made headway on enterprise deals, including CKE, Checkers & Rally’s and Del Taco, which have been using Presto’s drive-thru voice automation.
The company has also undergone some changes in its C-suite this year, with CEO and founder Rajat Suri resigning in March. Presto promoted Xavier Casanova to CEO in August from chief operating officer. He joined the company in 2022 as chief product officer. Dan Mosher also resigned as president and chief revenue officer on Oct. 16 after serving in these positions for three years. The firm said it hired Justin Foster, previously SVP of Sales at Presto, to serve as the company’s chief revenue officer, but didn’t indicate a replacement for the president position.
