There is a big question hanging over the dining industry. How important will online ordering and delivery be in a post-pandemic world?
The consensus answer seems to be that it will remain very important. This study forecasts online food delivery will reach $449 billion by 2025, from just $248 billion in 2020. And this week the UK online delivery service Deliveroo reported its earnings. It saw online food orders double during the first half of the year to $148.8 million. Deliveroo went public in March.
And ghost kitchens, online delivery’s cool cousin, don’t seem to be slowing down either. Their growth trajectory is expected to be at least as bullish as online delivery.
So it should come as no surprise that local food tech is hot and getting hotter. And we are seeing investors place their bets accordingly. In particular, we’ve been noting startups trying to help local, independent businesses play on a level food tech playing field with the big kids.
Startup Wants to Make Virtual Pivot Easy for Local Restaurants
Fighting Back Against ‘Greedy Third Parties’
Last week we told you about Forward Kitchens, a startup that makes it easy for independent restaurants to add a virtual restaurant brand and integrate them with delivery aggregators. The company raised a $2.5 million seed round to pursue its vision.
Today we read about Owner.com. This Palo Alto-based company, founded by a 21-year-old high school dropout and Thiel Fellow, just raised a $10.7 million seed round to help local restaurants handle online ordering without surrendering huge commissions plus all their customer data.
This seems like a tall order. And it’s still not entirely clear to us how Order.com does it.
The company’s website says it offers “Free online ordering for restaurants with built-in online marketing.” That sounds great. It also promises to reduce the amount restaurants pay to delivery aggregators while allowing the restaurant to retain control over its customer data. That sounds even better.
The website also includes several testimonials from restaurant owners with statements like this.
Owner.com also tosses out assertions on its website like this one. “It’s time to take back control of your business from the greedy third parties.” Yet, oddly, the company partners with the greediest of those third parties, Postmates, Uber Eats, and DoorDash. Owner.com lists all three as its delivery partners.
And then there is this statement.
We are definitely wondering how it saves its clients so much on delivery fees. Apparently, it has something to do with collective bargaining power. We also wonder how it keeps customer data out of the aggregators’ hands. But what we are really curious about is how it can assure Owner.com customers that first-time Dashers will never deliver a hot meal on their behalf.
Enter the Celebrity Investors
Its secret sauce may be a little mysterious. But the company and its charismatic young founder, Adam Guild (and co-founder Dean Bloembergen), did persuade some smart, big names investors that the business model is legit. According to TechCrunch, these include Jason Lemkin’s SaaStr Fund, reality TV business guy Marcus Lemonis, Elon Musk’s brother Kimbal, and a bunch of others. But not Ashton Kutcher.
Guild told TechCrunch that Owner.com has achieved a “seven-figure run-rate.” And that it has a 105%+ revenue retention rate across 700 restaurant locations. He also claims the company has handled more than $18 million in transaction volume. And finally, that it has saved customers $3 million in order fees from the greedy third parties. Not bad for a new company.
We certainly love the idea of helping independent restaurants fight back against the aggregators. We’re just a little unclear on how Owner.com is doing it.
