Restaurant tech companies are cashing in thanks to the pain points they address, like the current labor crisis and ongoing demand for delivery. According to Market Watch, the restaurant management software market is “anticipated to witness considerable growth in the coming years, with a projected 14.89% growth rate from 2016 to 2025.
The growing technology contributing to this growth includes customer interacting software that allows diners to pay and order at the table, data analytics solutions that support business decisions, and employee management.
One of the big players in the segment is 7shifts.
Millions Pouring Into 7shifts
Founded in 2014 by Jordan Boesch, 7shifts’ purpose is to simplify workforce management. The idea came to Boesch after working with his dad at Quiznos and watching him manage and build schedules for several employees in two locations.
The platform includes a drag-and-drop scheduler and a free mobile app that gives employees quick access. Built-in labor budgeting and compliance tools give operators optimal labor recommendations. Using AI, it forecasts staffing needs based on historical sales, the weather, and several other factors.
Over 27,000 restaurants across North America, Australia, the Middle East, and Europe use the scheduling platform. According to 7shifts, they have saved operators over $200 million in labor costs. And investors can’t seem to get enough.
7shifts just received $21.5 million in funding and wasn’t really looking for more capital when $80 million came their way.
In May 2016, the company raised $1.2 million, followed by $4.5 million in August 2017. Ten Coves and Relay Ventures were some of the first investors. Then, in January 2019, the Saskatoon-based restaurant labor management platform raised $10 million in Series A funding. This funding was led by Napier Park Financial Partners, an investment firm that provides financial services and technology for business.
In May 2021, the company brought in $21.5 million in Series B funding, led by Danny Meyer’s Enlightened Hospitality Investments, the investment arm of Union Square Hospitality Group. They put this money to work in several ways, including better break management for operators, automated tip management, hiring, training employees, paying, retaining, and onboarding products.
In February 2022, the brand received $80 million in funding led by SoftBank. This Tokyo-based Telecom company has been making major investments in tech and startups, from robotics to AI and satellites. Additional funding came from 7shift’s existing investors, Ten Coves Capital, and Enlightened Hospitality Investments.
Other Restaurant Tech Companies Making the News
Of course, 7shifts is not the only restaurant tech company to attract the attention of investors. In January 2022, Deliverect secured $150 million in Series D funding, bringing its valuation to more than $1.4 billion. The tech company has brought in $240 million since its conception in 2018.
Deliverect helps restaurants sell online, integrating online orders with a restaurant’s existing POS or Deliverect’s Delivery Manager app. The system also offers menus and stock management, analytics and reporting, and Deliverect Dispatch, a system that enables restaurants to take control of their own delivery experience.
Essentially, they aggregate all online and third-party delivery channels, such as DoorDash and Uber Eats, and push them to the restaurant’s POS and to the kitchen where they are printed. Orders are auto-assigned to a delivery partner or manually assigned to drivers, and both the restaurant and the customer receive real-time updates. Grubhub began partnering with Deliverect in November 2021.
According to Restaurant Dive, in 2021, Deliverect averaged around 1.5 million orders every week and has received about 100 million orders since it began.
A recent survey conducted by TD Bank revealed that restaurant operators are investing in technology and real estate due to changing customer-restaurant relationships brought on by the pandemic. Early in its onset, 72% of operators invested in online ordering and delivery. Today, 71% of those surveyed rely on delivery for at least 11% of their sales.
The top areas for investments in 2022 included mobile ordering, delivery services, POS digital signage, and alternative payment methods. Other restaurant tech companies experiencing rapid growth include Toast, a restaurant POS and management system, and Olo, which stands for online ordering.
Olo’s SaaS platform is designed for multi-location restaurant brands and sends online orders to restaurants’ POS and kitchens. This digital order aggregator is one of the largest in the sector. Olo shares soared 39% in afternoon trading during its public market debut, raising about $450 million.