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MarginEdge announced Monday it raised $18 million in Series B funding to give restaurant operators a real-time view into their costs.
Co-founder and CEO Bo Davis founded the company with Roy Phillips and Brian Mills in 2015. Both Davis and Phillips are veterans of the restaurant industry: Davis was previously the founder of conveyor belt sushi restaurant chain Wasabi, while Phillips was an executive at Bloomin Brands.
What they recognized with independent restaurants was that they struggled with workflow like invoices and tracking food costs and were either building internal tools to help them stay on top of things or were still operating with pen and paper or spreadsheets.
“We focused on building something our friends would like,” Davis told TechCrunch. “We spent three years on the product and worked with 20 restaurants to use the software and focus on getting it right instead of rushing to market.”
MarginEdge’s tool is a restaurant management app that works with a business’ point of sale to streamline inventory, cost-tracking, ordering and recipes to eliminate the paperwork. It also captures all invoices, receipts or bills and converts them to line-item details within 24 hours. It is designed for independent restaurant owners that have under 50 units, Davis said.
Since launching its app in 2018, the Virginia-based company is seeing its platform used in over 2,500 restaurants. It raised a Series A in 2019, then an A2 in 2020 and with the latest round, led by Schooner, has raised $25 million in total.
IGC Hospitality, which operates restaurant properties, is not only an investor, but is also a customer, said Jeffrey Brosi, founder and managing partner. The company was using some different technology platforms to manage inventory and sales, but was looking for something to manage its whole inventory process.
“Bo came in and did a presentation, and it was amazing,” Brosi added. “The biggest thing for us is [being] user friendly. MarginEdge also has great customer service. We’ve invested in a few companies in the hospitality industry, and know the pain points and what we want to fix. If it makes sense financially, we will invest. This was one pain point that we didn’t have, and Bo filled that void.”
Like all restaurants over the past 18 months, Davis said the global pandemic caused MarginEdge to step back and evaluate. Despite many restaurants going out of business, he credits his business taking off again to restaurants rethinking their processes.
“We were lucky enough to be in a good position with capital that we could keep our team,” he added. “Revenue decreased for the first time, but we grew 45% even with COVID and as of Q1 was seeing 200% annual growth.”
MarginEdge has over 400 employees and its platform processes 45,000 invoices a week. Davis intends to invest the new funding in building out the leadership team, product development, building new features for the back office and on data science, an area he just received an advanced degree in, he said.
The company is using benchmark data around sales, food costs and labor costs and would like to provide more insights to its customers as it relates to inflation, which affects all of those aspects, and as a result, the menu prices.
“A lot of it is using data to understand menu pricing and what other people are doing so you are not pricing yourself out of the market or operating on margins where you can’t survive,” Davis added. “It will be all about predicting rather than reporting. The two things in the kitchen that are hardest are the startup prep list and the inventory late at night, and we make both easier.”
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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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U.K. takeout marketplace Just Eat has announced a 30-day emergency support package for restaurants on its platform to help them through disruption caused by the coronavirus crisis.
From tomorrow (March 20) until April 19 the package — which Just Eat says is worth £10 million+ — will see funds directed back to U.K. partner restaurants in the form of a commission rebate of one-third (33%) on all commissions paid to Just Eat by restaurants; and via the removal of commissions across all collection orders, which it intends to help reduce pressure on restaurants’ delivery operations, where collection is still available.
Just Eat also said it’s waiving all sign-up fees for new restaurants joining its platform (which must still meet its standard conditions, such as being registered with the relevant local authority as a food business and having the required hygiene rating); and relaxing any existing arrangements that may be in place with partners to enable them to work with delivery aggregators — “regardless of existing contractual terms.”
It added that it will continue to pay restaurants weekly, including the rebate now in place.
Currently Just Eat has around 35,700 restaurants on its platform in the U.K., with delivery available to 95% of U.K. postcodes.
Commenting in a statement, Andrew Kenny, Just Eat’s U.K. MD, said:
These are some of the most challenging times the restaurants we work with have ever been through. We want to show our support and help them to keep their doors open, so they can focus on doing what they do best — delivering food to people across the UK every day. We know our Restaurant Partners are worried about their teams — from chefs to delivery drivers — and these measures will go some way to helping them maintain their operations and support their people.
The food delivery industry has a crucial role to play at this time of national crisis and it is only right that as the market leader in the UK Just Eat steps up to help our independent partners so they can keep delivering for the communities that need them.
In the U.K. and elsewhere there is rising concern about the economic impact of COVID-19 on the hospitality sector as people are told to stay away from social spaces.
On Monday the U.K. government advised people not to go to bars and restaurants or other social spaces in a bid to try to limit the spread of COVID-19. Although, unlike many other European countries, it has not yet issued strict quarantine measures such as ordering hospitality industry businesses to close their doors and citizens to work at home where possible.
On-demand food delivery remains one of the services that continues to operate even in locked down EU Member States. However, with gig economy business models not typically offering platform workers an employment safety net of benefits such as sick pay, the entire sector has come under fresh scrutiny for the legal status it assigns to delivery couriers, given the heightened risks posed to them by the novel coronavirus. In a nutshell, if they need to self isolate, they won’t be able to earn.
In its press release today Just Eat said it’s working on other unspecified support initiatives for couriers, as well as for groups including the vulnerable and isolated, and frontline workers.
These will be announced in due course, it added.
Although it also notes that the vast majority of orders placed through its network are delivered by restaurants with their own delivery capability. Its commission for such orders is a maximum of 14%, it added.
Some on-demand food delivery startups operating in Europe which do rely on gig workers to make deliveries have already announced emergency support funds to help platform workers who fall ill or need to self isolate during the COVID-19 crisis — including U.K.-based Deliveroo and Spain’s Glovo.
There has also been some criticism of how easy it is for couriers to access claimed support.
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Creator’s transparent burger robot doesn’t grind your brisket and chuck steak into a gourmet patty until you order it. That’s just one way this startup, formerly known as Momentum Machines, wants to serve the world’s freshest cheeseburger for just $6. On June 27th, after eight years in development, Creator unveils its first robot restaurant before opening to the public in September. We got a sneak peek…err…taste.
When I ask how a startup launching one eatery at a time could become a $10 billion company, Creator co-founder and CEO Alex Vardakostas looks me dead in the eye and says, “the market is much bigger than that.”
Here’s how Creator’s burger-cooking bot works at its 680 Folsom Street location in San Francisco. Once you order your burger style through a human concierge on a tablet, a compressed air tube pushes a baked-that-day bun into an elevator on the right. It’s sawed in half by a vibrating knife before being toasted and buttered as it’s lowered to conveyor belt. Sauces measured by the milliliter and spices by the gram are automatically squirted onto the bun. Whole pickles, tomatoes, onions and blocks of nice cheese get slices shaved off just a second before they’re dropped on top.
Meanwhile, the robot grinds hormone-free, pasture-raised brisket and chuck steak to order. But rather than mash them all up, the strands of meat hang vertically and are lightly pressed together. They form a loose but auto-griddleable patty that’s then plopped onto the bun before the whole package slides out of the machine after a total time of about five minutes. The idea is that when you bite into the burger, your teeth align with the vertical strands so instead of requiring harsh chewing it almost melts in your mouth.

If you want to be the first to try it, Creator is selling early access tickets at 10am Pacific today. Otherwise it will be open for lunch Wednesdays and Thursdays until the public launch. Eventually, an app will let people customize the exact ratios of all the ingredients, unlocking near infinite permutations.
For now, the startup’s initial pre-set burger options include the classic-style Creator vs. The World with a mole Thousand Island special sauce, the oyster aioli Tumami Burger designed by Chef Tu of Top Chef, The Smoky with charred onion jam and the sunflower seed tahini Dad Burger from Chef Nick Balla of Bar Tartine.

The taste of each is pretty remarkable. The flavor pops out of all the fresh-cut and ground ingredients that lack the preservatives of pre-sliced stuff. The patties hold together as you munch despite being exceedingly tender. And afterwards I felt less of the greasy, gut-bomb, food coma vibe that typically accompanies scarfing down a cheeseburger.
“This is the kind of burger you would get for $12 to $18 [at an upscale restaurant], and it’s $6,” says Vardakostas. It might not be the best burger I’ve had in my life, but it’s certainly the best at that price. A lot of that comes from the savings on labor and kitchen space afforded by a robot cook. “We spend more on our ingredients than any other burger restaurant.”
The CEO wouldn’t reveal how much Creator has raised, but says it’s backed by Google’s GV, frequent food startup investor Khosla Ventures and hardware-focused Root Ventures. However, SEC filings attained by TechCrunch show the startup raised at least $18.3 million in 2017, and sought $6 million more back in 2013.
It’s understandable why. “McDonald’s is a $140 billion company. It’s bigger than GM and Tesla combined. McDonald’s has 40,000 restaurants. Food is one to the top three biggest markets,” Vardakostas rattles off. “But we have a lot of advantages. The average restaurant is 50 percent bigger in terms of square footage.” Then he motions to his big robot that’s a lot smaller than the backside of most fast-food restaurants, and with a smile says, “That’s our kitchen. You roll it in and plug it in.”
Creator co-founder and CEO Alex Vardakostas
What you want in a founder is a superhero origin story. Some formative moment in their life that makes them hellbent on solving a problem. Vardakostas has a pretty convincing tale. “My parents have a burger joint,” he reveals. “My job was to make several hundred of the same burger every day. You realize there’s so much opportunity not taken because you don’t have the right tools, and it’s hard work.”
Robots and engineering weren’t even on his radar growing up in the restaurant in southern California. Then, “when I was 15 my dad took me to a book store for the first time. I started reading about physics and realizing that this could be a possibility.” He went on to study physics at UC Santa Barbara, got to work in the garage, and finally drove up to Silicon Valley to machine the first robot prototype’s parts at the famous Silicon Valley TechShop.
That’s when he met his co-founder and COO Steve Frehn. “Steve told me he was from Stanford and I was super intimidated,” Vardakostas recalls. But the two had a great working rapport, and a knack for recruiting budding mechanical engineers from the college. Momentum Machines started in 2009, was a full-time garage project by 2010, incorporated and joined Lemnos Labs in 2012 and the startup began to make serious progress by 2014.

In the meantime, other entrepreneurs have tried to find a business in food robots. There was the now-defunct Y Combinator startup Bistrobot that haphazardly spurted liquid peanut butter and Nutella on white bread and called it a sandwich. More recently, Miso Robotics’ burger-flipping arm named Flippy made headlines, even though all it does is flip and cook patties on a traditional griddle. “We have an arm that pulls out the burgers, but that’s probably 5 percent of the complexity” of the full Creator robot run by 350 sensors, 50 actuators and 20 computers, Vardakostas scoffs.
The CEO’s past in the kitchen keeps Creator in touch with the human element. He tells me he thinks the idea of a staff-less restaurant where you order on a computer sounds “dystopian.” In fact, he wants to give his food service employees access to new careers. Vardakostas says with a sigh that “people look at restaurant work as a charity case, but man, we just need a chance.” Referring to the old Google policy of letting employees try out side projects, he explains how “Tech companies get 10 percent time but no one does that for restaurant workers.”

“Something we got really excited about in 2012 and we’re just starting to execute on is reinventing the job of working in a store like this, where the machine it taking care of the dirty and dangerous work,” his co-founder Frehn explains. “We’re playing around with education programs for the staff. Five percent of the time they’re paid just to read. We’re already doing that. There’s a book budget. We’re paying $16 an hour. As opportunities come up to fix the machine, there’s a path we’re going to offer people as repair or maintenance people to get paid even more.”
One tradition Creator couldn’t escape was French fries. Vardakostas says they’re basically the least healthy thing you can eat, noting they’re “worse than donuts because there’s more surface area exposed to the frier.” But chefs told him some people simply wouldn’t eat a burger without them. Creator’s compromise is that burgers are paired with hearty miniature farro or seasonal veggie salads by default, but you can still opt for a side of frites.
Creator’s fate won’t just be determined by the burger robot and the people who work alongside it. The startup will have to prove to fast food diners that it can be just as quick and cheap but a lot tastier, and that they’re welcome amongst the restaurant’s bougie Pottery Barn decor. At the same time, it must convince more affluent eaters that a cafeteria-style ordering counter and low price don’t mean low quality. Oh, and the name is a bit rich for a burger spot.
For now, Creator won’t be licensing out its bot or franchising its restaurant, though those could be lucrative. “I don’t want someone putting frozen beef in there or charging way more,” says Vardakostas. Instead, the goal is to methodically expand, and maybe take advantage of its petite footprint to move into airport terminals or bus stations. “We want to get out of San Francisco,” Frehn confidently concludes. “Our business model is pretty simple. We take a really good burger that people like and sell it for half the price.”
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