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AgBiome lands $116M for safer crop protection technology
AgBiome, developing products from microbial communities, brought in a $116 million Series D round as the company prepares to pad its pipeline with new products.
The company, based in Research Triangle Park, N.C., was co-founded in 2012 by a group including co-CEOs Scott Uknes and Eric Ward, who have known each other for over 30 years. They created the Genesis discovery platform to capture diverse microbes for agricultural applications, like crop protection, and screen the strains for the best assays that would work for insect, disease and nematode control.
“The microbial world is immense,” said Uknes, who explained that there is estimated to be a trillion microbes, but only 1% have been discovered. The microbes already discovered are used by humans for things like pharmaceuticals, food and agriculture. AgBiome built its database in Genesis to house over 100,000 microbes and every genome in every microbe was sequenced into hundreds of strains.
The company randomly selects strains and looks for the best family of strains with a certain activity, like preventing fungus on strawberries, and creates the product.
AgBiome co-CEOs Scott Uknes and Eric Ward. Image Credits: AgBiome
Its first fungicide product, Howler, was launched last year and works on more than 300 crop-disease combinations. The company saw 10x sales growth in 2020, Uknes told TechCrunch. As part of farmers’ integrated pest program, they often spray fungicide applications 12 times per year in order to yield fruits and vegetables.
Due to its safer formula, Howler can be used as the last spray in the program, and its differentiator is a shorter re-entry period — farmers can spray in the morning and be able to go back out in the field in the afternoon. It also has a shorter pre-harvest time of four hours after application. Other fungicides on the market today require seven days before re-entry and pre-harvest, Uknes explained.
AgBiome aims to add a second fungicide product, Theia, in early 2022, while a third, Esendo was submitted for Environmental Protection Agency registration. Uknes expects to have 11 products, also expanding into insecticides and herbicides, by 2025.
The oversubscribed Series D round was co-led by Blue Horizon and Novalis LifeSciences and included multiple new and existing investors. The latest investment gives AgBiome over $200 million in total funding to date. The company’s last funding round was a $65 million Series C raised in 2018.
While competitors in synthetic biology often sell their companies to someone who can manufacture their products, Uknes said AgBiome decided to manufacture and commercialize the products itself, something he is proud of his team for being able to do.
“We want to feed the world responsibly, and these products have the ability to substitute for synthetic chemicals and provide growers a way to protect their crops, especially as consumers want natural, sustainable tools,” he added.
The company has grown to over 100 employees and will use the new funding to accelerate production of its two new products, building out its manufacturing capacity in North America and expanding its footprint internationally. Uknes anticipates growing its employee headcount to 300 in the next five years.
AgBiome anticipates rolling up some smaller companies that have a product in production to expand its pipeline in addition to its organic growth. As a result, Uknes said he was particular about the kind of investment partners that would work best toward that goal.
Przemek Obloj, managing partner at Blue Horizon, was introduced to the company by existing investors. His firm has an impact fund focused on the future of food and began investing in alternative proteins in 2016 before expanding that to delivery systems in agriculture technology, he said.
Obloj said AgBiome is operating in a $60 billion market where the problems include products that put toxic chemicals into the ground that end up in water systems. While the solution would be to not do that, not doing that would mean produce doesn’t grow as well, he added.
The change in technology in agriculture is enabling Uknes and Ward to do something that wasn’t possible 10 years ago because there was not enough compute or storage power to discover and sequence microbes.
“We don’t want to pollute the Earth, but we have to find a way to feed 9 billion people by 2050,” Obloj said. “With AgBiome, there is an alternative way to protect crops than by polluting the Earth or having health risks.”
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Forward Kitchens cooks up $2.5M to transform existing kitchens into digital storefronts
Forward Kitchens was working quietly on its digital storefront for restaurants and is now announcing a $2.5 million seed round.
Raghav Poddar started the company two years ago and was part of the Y Combinator Summer 2019 cohort. Poddar told TechCrunch he has been a foodie his entire life. Lately, he was relying on food delivery and pickup services, and while visiting with some of the restaurant owners, he realized a few things: first, not many had a good online presence, and second, these restaurants had the ability to cook cuisine representative of their communities.
That led to the idea of Forward Kitchens, which provides a turnkey tool for restaurants to set up an online presence, including food delivery, where they can create multiple digital storefronts easily and without having to contact each delivery platform. The company ran pilot programs in a handful of restaurants, and this is the first year coming out of stealth.
“It’s an expansion of what they have on the menu, but is not immediately available in the neighborhood,” Poddar added. “Kitchens can keep the costs and headcount the same, but be able to service the demand and get more orders because it is fulfilling a need for the neighborhood, which is why we can grow so fast.”
Here’s how it works: Forward Kitchens goes into a restaurant and takes into account its capacity for additional cooking and the demographic area, as well as what food is available near it, and helps the restaurant create the storefront.
Each restaurant is able to build multiple storefronts, for example, an Italian restaurant setting up a storefront just to sell its popular mac n’ cheese or other small plates on demand. A couple hundred digital storefronts were already created, Poddar said.
A group of investors, including Y Combinator, Floodgate, Slow Ventures and SV Angel and angel investors Michael Seibel of YC, Ram Shriram and Thumbtack’s Jonathan Swanson, were involved in the round.
The new funding will be used to expand the company’s footprint and reach, and to hire a team in operations, sales and engineering to help support the product.
“Forward Kitchens is empowering independent kitchens to create digital storefronts and receive more online sales,” Seibel said via email. “With Forward Kitchens, a kitchen can create world-class digital storefronts at the click of a button.”
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Mealworm farming company Beta Hatch raises $10M
Last time I was in Hong Kong, a startup gave me a jar of mealworms as a snack. They were crunchy and a bit odd looking (as one might expect from a jar full of baked larvae). They really didn’t offer much in the way of flavor, though, so maybe supply your own seasoning.
For all sorts of sustainability reasons, there’s been a good deal of interest in these sorts of alternative protein sources — for humans and otherwise. Beta Hatch’s farming efforts are squarely focused on the latter, citing livestock and pets as primary targets for a farming process it says is “virtually zero-waste.”
Today the St. Louis-based firm announced $10 million in funding in a round led by Lewis & Clark AgriFood, with participation from Cavallo Ventures and Innova Memphis, which are both signed on as existing investors. The money comes as Beta Hatch is eyeing the expansion of its flagship farm in Cashmere, Washington.
“We are proud to be a part of building the future of farming as a member of the Washington agricultural community,” founder and CEO Virginia Emery said in a release. “We are excited for our presence in rural America to grow, as we employ and partner with the people in those communities to feed a growing global population.”
The company says the new facility will be the largest of its kind in North America, helping to push Beta Hatch to 10x its current output over the next year. The location is currently powered by renewably sourced energy.
Mealworms have proven intriguing as food sources for food sources, as evidenced by Ÿnsect’s $125 million raise way back in 2019.
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Apeel bites into another $250M funding round, at a $2B valuation, to accelerate fresh food supply chains
Apeel Sciences, a food system innovation company, is out to prevent food produced globally from ending up in the landfill, especially as pressures from the global pandemic affect the food supply chain.
The company just added $250 million in Series E funding, giving it a valuation of $2 billion, to speed up the availability of its longer-lasting produce in the U.S. (where approximately 40% of food is wasted), the U.K. and Europe.
Existing investor Temasek led the round and was joined by a group of new and existing investors, including Mirae Asset Global Investments, GIC, Viking Global Investors, Disruptive, Andreessen Horowitz, Tenere Capital, Sweetwater Private Equity, Tao Capital Partners, K3 Ventures, David Barber of Almanac Insights, Michael Ovitz of Creative Artists Agency, Anne Wojcicki of 23andMe, Susan Wojcicki of YouTube and Katy Perry.
With the new funding, Apeel has now raised over $635 million since the company was founded in 2012. Prior to this round, the company brought in $250 million in Series D funding in May 2020.
Santa Barbara-based Apeel developed a plant-based layer for the surface of fruits and vegetables that is tasteless and odorless and that keeps moisture in while letting oxygen out. It is those two factors in particular that lead to grocery produce lasting twice as long, James Rogers, CEO of Apeel, told TechCrunch.
Apeel installs its application at the supplier facilities where the produce is packed into boxes. In addition to that technology, the company acquired ImpactVision earlier this year to add another layer of quality by integrating imaging systems on individual pieces as they move through the supply chain to optimize routing so more produce that is grown is eaten.
“One in nine people are going hungry, and if three in nine pieces of produce are being thrown away, we can be better stewards of the food we are throwing away,” Rogers said. “This is a solvable problem, we just have to get the pieces to the right place at the right time.”
The company is not alone in tackling food waste. For example, Shelf Engine, Imperfect Foods, Mori and Phood Solutions are all working to improve the food supply chain and have attracted venture dollars to go after that mission.
Prior to the pandemic, the amount of food people were eating was growing each year, but that trend is reversed, Rogers explained. Consumers are more aware of the food they eat, they are shopping less frequently, buying more per visit and more online. At the same time, grocery stores are trying to sort through all of that.
“We can’t create these supply networks alone, we do it in concert with supply and retail partners,” he said. “Grocery stores are looking at the way shoppers want to buy things, while we look at how to partner to empower the supply chain. What started with longer-lasting fruits and vegetables, is becoming how we provide information to empower them to do it without adding to food waste.”
Since 2019, Apeel has prevented 42 million pieces of fruit from going to waste at retail locations; that includes up to 50% reduction in avocado food waste with corresponding sales growth. Those 42 million pieces of saved fruit also helped conserve nearly 4.7 billion liters of water, Rogers said.
Meanwhile, over the past year, Apeel has amassed a presence in eight countries, operating 30 supply networks and distributing produce to 40 retail partners, which then goes out to tens of thousands of stores around the world.
The new funding will accelerate the rollout of those systems, as well as co-create another 10 supply networks with retail and supply partnerships by the end of the year. Rogers also expects to use the funding to advance Apeel’s data and insights offerings and future acquisitions.
Thomas Park, president and head of alternative investments at Mirae Asset Global Investments, said his firm has been investing in environmental, social and governance-related companies for awhile, targeting companies that “make a huge impact globally and in a way that is easy for us to understand.”
The firm, which is part of Mirae Asset Financial Group, often partners with other investors on venture rounds, and in Apeel’s case with Temasek. It also invested with Temasek in Impossible Foods, leading its Series F round last year.
“When we saw them double-down on their investment, it gave us confidence to invest in Apeel and an opportunity to do so,” Park said. “Food waste is a global problem, and after listening to James, we definitely feel like Apeel is the next wave of how to attack these huge problems in an impactful way.”
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Orchata raises $4M, aims to build a ‘Gopuff for Latin America’
Luis Mario Garcia grew up in Mexico making deliveries for the grocery stores in his neighborhood. After honing his startup skills in San Francisco, he returned to Mexico with the idea of building a software company.
That’s when he met his co-founder Javier Gonzalez and the pair started Orchata in 2020, a mobile app enabling consumers to get groceries delivered in 15 minutes, with no substitutes and at supermarket prices. Products delivered include fresh fruit, beverages, bread, medicine and household essentials, Garcia told TechCrunch.
Orchata does this by operating a network of micro fulfillment centers — it is already operating in two cities — with technology for efficient picking and hyperfast delivery.
Online food delivery sales in Latin America are projected to reach $9.8 billion by 2024, with the global pandemic driving demand for faster delivery, according to Statista. Garcia sees three different waves in this market: the first one being traditional supermarkets, where you can spend hours, which led to the second wave of food delivery companies, including some big players in the region — for example Rappi in Colombia, which in July raised $500 million in Series F funding at a $5.25 billion valuation in a round led by T. Rowe Price, and Cornershop in Chile, which was acquired by Uber in 2019.
However, Garcia said many of these services still take more than an hour from order to doorstep and may require phone calls if an item is not available. He wants to be part of a third wave — software that is integrated with inventory and delivery that is super fast, and no substitutions.
“This is similar to what is going on around the world, but there is a huge opportunity to bring convenience, to be the Gopuff for Latin America, and we want to build it first in the region,” Garcia said.
The Monterrey-based company was part of Y Combinator’s summer 2020 cohort and on Friday announced a $4 million seed round from a group of investors, including Y Combinator, JAM Fund, FJ Labs, Venture Friends, Investo and Foundation Capital, and angel investors Ross Lipson, Mike Hennessey, Brian Requarth and Javier Mata.
Jonathan Lewy, co-founder of Grin Scooters and founder of Investo, is also an investor in Rappi. He said Garcia was building a product for the end user, with the key being the building of the infrastructure and inventory. Lewy believes Garcia understands how quick delivery should be done and that it is not just about offering a mobile app, but building the technology behind it.
Meanwhile, Justin Mateen, general partner at JAM Fund, and co-founder of Tinder and an early-stage investor, met Garcia over a year ago and was one of the company’s first investors. He said Garcia’s and Gonzalez’s initial idea for the model of grocery stores was still not solving the problem, but then they pivoted to doing fulfillment and inventory themselves.
“He fits the mold of what I look for in a founder, and he is the type of founder that doesn’t give up,” Mateen said. “Luis finally agreed to let me double down on my investment. The model makes sense now, he is on to something and it is now going to be about execution of capital as he scales.”
Both Mateen and Lewy agree that there will be similar apps coming because food delivery is such a large market, but that Orchata has a clear advantage of owning the customer experience from beginning to end.
Having only launched four months ago, Orchata is already processing thousands of orders and is seeing 100% monthly growth. The new funding will enable Orchata to expand into three new cities in Mexico. Garcia is also eyeing Colombia, Brazil, Peru and Chile for future expansion.
The company is also targeting multiple use cases, including someone noticing a forgotten item while cooking to consumers shopping for the week or teenagers needing food for a party.
“We are going to be super convenient to customers, and we think every use case for food delivery will be this way in the future,” Garcia said. “We will eventually introduce our own brands and foods with the goal of being that app that is there anytime you need it.”
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Mushroom-based meat alternative startup Fable Food raises $6.5M AUD, will launch in the US
Sydney, Australia-based Fable Food is the latest plant-based food startup to announce funding. The company, which uses mushrooms in its meat alternatives, has raised $6.5 million AUD (about $4.8 million USD) in a seed round led by Blackbird Ventures, the Australian venture capital firm whose portfolio also includes Canva, Culture Amp and SafetyCulture. Other participants included agriculture and food tech venture firm AgFunder, sustainability-focused Aera VC and Better Bite Ventures, along with Singapore-based produce importer Ban Choon Marketing and former Sequoia Capital partner Warren Hogarth.
Fable is preparing to launch in the United States by the end of this year. In Australia, its products are available at retailers like Woolworths, Coles and Harris Farm Markets, along with restaurants including Grill’d, which recently started serving its Meaty Mushroom Burger Pattie at 136 locations. Fable’s products are also available at restaurants in Singapore and the United Kingdom.
The startup was founded in 2019 by fine dining chef turned chemical engineer and mycologist (mushroom scientist) Jim Fuller, organic mushroom farmer Chris McLoghlin and Michael Fox, whose previous startup was Shoes of Prey.
Fox, Fable’s chief executive officer, told TechCrunch in an email that after being a vegetarian for six years, he recently became a vegan “for a mix of health, environmental and ethical reasons.”
“Talking to my friends and family, a lot of people want to reduce their meat consumption for the same reasons but they find it challenging because they love the taste and texture of meat and giving it up is hard,” Fox said. He wanted to find a way to make it easier for people to transition to plant-based foods, and spoke to several chefs who suggested using mushrooms as a base ingredient. Then Fox met Fuller and McLoghlin, who were in the process of developing meat alternatives using mushrooms.
“When we met, we realized we shared the same values and goals and had complementary skill sets,” said Fox. “We shared a common desire to help end industrial agriculture and wanted to make our food system more ethical, healthy, sustainable and lower its greenhouse gas emissions.”
Fable’s first products include a substitute for pulled pork, braised beef and beef brisket (Fuller grew up in Texas eating slow-cooked meats and wanted to recreate the experience), along with a line of ready-made meals. The company uses shiitake mushrooms, which Fox explained are “very flavorful with their natural umami flavors, they are a slow-growing mushroom so they naturally have the fleshy fibers that give the meaty bite you typically get from animal proteins, and have the right chemical composition that when cooked allow us to taste flavors that are found in animal products.”
Fable’s ready-made meals. Image Credits: Fable
Fuller serves as Fable’s chief science officer and the startup leverages his experience as a chef/chemical engineer/mycologist to create the right combinations of flavor, aroma and texture while keeping processing and ingredients to a minimum. For example, its braised beef alternative is made with shiitake mushrooms, seven other ingredients and salt and pepper.
Fable also announced today it has appointed Dan Joyce, who was previously safety and compliance software company SafetyCulture’s general manager of Europe, the Middle East and Africa, as chief growth officer to head global sales and marketing. It will launch in the U.S. through a combination of partnerships with restaurants and meal kit companies.
Other startups that use mushrooms as basis for meat alternatives include Meati and AtLast. Fox said a main difference is that those two startups ferment mycelium, or the root structure of fungi, instead of using mushrooms, which are the fruiting body of fungi.
Fable’s new funding will be used for research and development, expanding its production and manufacturing capacity in Australia and other countries. The company is keeping its product pipeline under wraps for now, but Fox said it plans to develop mushroom-based substitutes for pork, chicken, lamb and other animal proteins.
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Bite Ninja scoops up pre-seed funding to reimagine restaurant working environments
Will Clem knows all too well about restaurant workers not showing up for a shift. At least one person would have car trouble or need to stay home with sick children, and it became a common occurrence on the weekends for the co-founder of Memphis Meats and owner of Baby Jacks BBQ in Memphis.
Needing to fill a shift one Friday night, Clem decided to prop his laptop in the drive-thru lane of one of his restaurants and took orders from home by remoting into the system. No one noticed that he wasn’t actually taking orders from the kitchen itself. Thus came the idea for Bite Ninja, a remote hiring technology platform for restaurants.
Clem connected with Orin Wilson to start the company in 2020 and worked for a year on the technology before launching it in March. Today, the company announced $675,000 in pre-seed funding led by Y Combinator, AgFunder and Manta Ray.
With many restaurants unable to find workers as a result of the global pandemic, Clem and Wilson wanted to build a technology that would enable restaurants to go back to normal operating hours, or even reopen their stores. At the same time, the workers, or “Ninjas” as they are referred to, can work the drive-thru or counter for a lunch or dinner rush shift from home, but appear on-screen to customers via menu boards, Wilson said.
Bite Ninja drive-thru. Image Credits: Bite Ninja
“When a restaurant is slammed, you need an army of people to work the rush, but it is not reasonable to ask them to get in their uniform and get in their cars, last-minute, to clock in for just an hour or two,” he added. “They have control of their schedule and can pick the right shift for them. It is so popular that we typically have five to 10 people bidding on each shift.”
Bite Ninja is providing a better experience and reaches potential workers that would not necessarily have an interest in performing fast food work. Many of the 3,000 Ninjas already working with the company are stay-at-home moms and retirees with customer service experience, but who can’t physically come into a store, Clem said. In addition, the company is working with the Nurse-Family Partnership to help women get back into the workforce.
The company initially ran three pilot programs and has expanded services to curbside and front cashier stations. The funding will enable Bite Ninja to scale initiatives, hire additional software engineers and prepare for a rollout at national food chains.
Since launching earlier this year, Bite Ninja is already being used in a few thousand stores.
Manuel Gonzalez, partner at AgFunder, said restaurants are a big part of entrepreneurship, but the pandemic forced more than 110,000 of them out of business.
“Bite Ninja’s solution is one that decreases costs to restaurant owners, but increases the income of the worker,” he said. “It also helps entrepreneurs and the community because restaurants are important for economic, cultural, community and social points of view.”
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Australia’s v2Food aims to expand its plant-based meats to Europe and Asia with €45M raise
V2Food is one of many new contenders in the alternative protein space, founded in Australia but now setting its sights on Europe, Asia and beyond. It has a few key advantages over the competition, and with €45 million in new funding it may be finding its way to plates in the Eurozone soon.
The company has seen strong uptake in its home market, and the first goal is to be No. 1 in Australia, said CEO and founder Nick Hazell, formerly of MasterFoods and PepsiCo R&D. But in the meantime they’ll be expanding their presence in Asia, where partner Burger King has launched a Whopper with their patty, and in Europe, where the product’s minimal suspicious elements come into play.
Currently v2Food makes plant-based ground beef and patties, sausages and a ready-made Bolognese sauce. Obviously they have strong competition in those categories, which are sort of the opening play of most alternative protein companies. But v2Food has a leg up on many of them in two ways.
Image Credits: v2Food
First, v2Food products are made, or at least can be made, using “any standard meat production facility.” That’s a big plus for scaling and a minus for cost, since economies of scale are already in play. The processes for creating and mixing the plant-derived and other artificial substances that make up alternative proteins in general aren’t always amenable to existing infrastructure. This also opens the door to partnerships with existing meat companies that might have balked at having to switch processes. (Incidentally, Hazell noted that what they’re aiming for isn’t so much about replacing traditional meats so much as growing the market in a new direction, a philosophy those companies may appreciate.)
Second, as the press release announcing the fundraise puts it, “v2food products do not contain GMOs, preservatives, colors or flavorings. This makes it an ideal product for the European market, where the many large competitors have been unable to enter the market due to strict regulation.” It’s also a soft advantage for winning over in-store buyers vacillating between two plant-based options; who hasn’t on occasion ended up going for the one with fewer ingredients that proudly touts its lack of preservatives and such? The alt-protein buying demographic is likely especially sensitive to this consideration.
The €45 million round is a “B Plus,” led by European impact fund Astanor, with participation from Huaxing Growth Capitol Fund, Main Sequence and ABC World Asia. The money is going toward both R&D and scaling.
“This funding is an important step towards v2food’s goal of transforming the way the world produces food,” said Hazell. “It’s imperative that we scale quickly because these global issues need immediate solutions.”
To that end a large portion will go toward simply creating enough product to meet demand. They’re also doubling R&D spend to both accelerate new products and improve the existing ones. And rather than import the necessary ingredients to Australia, they’re exploring the possibility of building a local manufacturing facility there. With luck and a bit of plant-based elbow grease, the region could become a net exporter, propping up the local economy as well as building up v2Food’s resilience and cutting costs.
The Europe expansion is still a twinkle in the company’s (and Astanor’s) eye, for even with its simplicity and non-GMO origins, it’s not trivial to launch a new product in the European market.
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Planted raises another $21M to expand its growing plant-based meat empire (and add schnitzel)
Swiss alternative protein company Planted has raised its second round of the year, a CHF 19 million (about $21 million at present) “pre-B” fundraise that will help it continue its growth and debut new products. A U.S. launch is in the cards eventually, but for now Planted’s exclusively European customers will be able to give its new veggie schnitzel a shot.
Planted appeared in 2019 as a spinoff from Swiss research university ETH Zurich, where the founders developed the original technique of extruding plant proteins and water into fibrous structures similar to real meat’s. Since then the company has diversified its protein sources, adding oat and sunflower to the mix, and developed pulled pork and kebab alternative products as well.
Over time the process has improved as well. “We added fermentation/biotech technologies to enhance taste and texture,” wrote CEO and co-founder Christoph Jenny in an email to TechCrunch. “Meaning 1) we can create structures without form limitation and 2) can add a broader taste profile.”
The latest advance is schnitzel, which is of course a breaded and fried piece of pounded-thin meat style popular around the world, but especially in the company’s core markets of Germany, Austria and Switzerland. Jenny noted that Planted’s schnitzel is produced as one piece, not pressed together from smaller bits. “The taste and texture benefit from fermentation approach, that makes the flavor profile mouth watering and the texture super juicy,” he said, though of course we will have to test it to be sure. Expect schnitzel to debut in Q3.
It’s the first of several planned “whole” or “prime” cuts, larger pieces that can be prepared like any other piece of meat — the team says their products require no special preparation or additives and can be dropped in as 1:1 replacements in most recipes. Right now the big cuts are leaving the lab and entering consumer testing for taste tuning and eventually scaling.
The funding round came from “Vorwerk Ventures, Gullspång Re:food, Movendo Capital, Good Seed Ventures, Joyance, ACE & Company (SFG strategy) and Be8 Ventures,” and was described as a follow-on to March’s CHF 17M series A. No doubt the exploding demand for alternative proteins and growing competition in the space has spurred Planted’s investors to opt for more aggressive growth and development strategies.
The company plans to enter several new markets over Q3 and Q4, but the U.S. is still a question mark due to COVID-19 restrictions on travel. Jenny said they are preparing so that they can make that move whenever it becomes possible, but for now Planted is focused on the European market.
(Update: This article originally misstated the new round as also being CHF 17M — entirely my mistake. This has been corrected.)
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ConverseNow is targeting restaurant drive-thrus with new $15M round
One year after voice-based AI technology company ConverseNow raised a $3.3 million seed round, the company is back with a cash infusion of $15 million in Series A funding in a round led by Craft Ventures.
The Austin-based company’s AI voice ordering assistants George and Becky work inside quick-serve restaurants to take orders via phone, chat, drive-thru and self-service kiosks, freeing up staff to concentrate on food preparation and customer service.
Joining Craft in the Series A round were LiveOak Venture Partners, Tensility Venture Partners, Knoll Ventures, Bala Investments, 2048 Ventures, Bridge Investments, Moneta Ventures and angel investors Federico Castellucci and Ashish Gupta. This new investment brings ConverseNow’s total funding to $18.3 million, Vinay Shukla, co-founder and CEO of ConverseNow, told TechCrunch.
As part of the investment, Bryan Rosenblatt, partner at Craft Ventures, is joining the company’s board of directors, and said in a written statement that “post-pandemic, quick-service restaurants are primed for digital transformation, and we see a unique opportunity for ConverseNow to become a driving force in the space.”
At the time when ConverseNow raised its seed funding in 2020, it was piloting its technology in just a handful of stores. Today, it is live in over 750 stores and grew seven times in revenue and five times in headcount.
Restaurants were some of the hardest-hit industries during the pandemic, and as they reopen, Shukla said their two main problems will be labor and supply chain, and “that is where our technology intersects.”
The AI assistants are able to step in during peak times when workers are busy to help take orders so that customers are not waiting to place their orders, or calls get dropped or abandoned, something Shukla said happens often.
It can also drive more business. ConverseNow said it is shown to increase average orders by 23% and revenue by 20%, while adding up to 12 hours of extra deployable labor time per store per week.
Company co-founder Rahul Aggarwal said more people prefer to order remotely, which has led to an increase in volume. However, the more workers have to multitask, the less focus they have on any one job.
“If you step into restaurants with ConverseNow, you see them reimagined,” Aggarwal said. “You find workers focusing on the job they like to do, which is preparing food. It is also driving better work balance, while on the customer side, you don’t have to wait in the queue. Operators have more time to churn orders, and service time comes down.”
ConverseNow is one of the startups within the global restaurant management software market that is forecasted to reach $6.94 billion by 2025, according to Grand View Research. Over the past year, startups in the space attracted both investors and acquirers. For example, point-of-sale software company Lightspeed acquired Upserve in December for $430 million. Earlier this year, Sunday raised $24 million for its checkout technology.
The new funding will enable ConverseNow to continue developing its line-busting technology and invest in marketing, sales and product innovation. It will also be working on building a database from every conversation and onboarding new customers quicker, which involves inputting the initial menu.
By leveraging artificial intelligence, the company will be able to course-correct any inconsistencies, like background noise on a call, and better predict what a customer might be saying. It will also correct missing words and translate the order better. In the future, Shukla and Aggarwal also want the platform to be able to tell what is going on around the restaurant — what traffic is like, the weather and any menu promotions to drive upsell.
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