Lunchbox Gets Another $50M as Restaurants Continue to Go Digital
These last two years have certainly been challenging for restaurants. Those that were late in their adoption of tech, or refused to use it altogether, were generally left behind. And even some restaurants that did embrace third-party delivery services like DoorDash and Uber Eats were left financially gutted due to their sky-high service fees.
At the same time, though, there’s been a lot of innovation in this space, too. “Ghost kitchens” — digital-first restaurants that only allow for carryout or delivery — have become hugely popular, with some garnering support from industry leaders like Grubhub and VC giants like SoftBank. Meanwhile, other eateries, including popular salad chain sweetgreen, are embracing robots to be more efficient.
Here to better support these innovative up-and-comers, as well as long standing restaurant chains, is Lunchbox. Over the past couple of years, the NYC-based startup has developed tools for these businesses to serve as their entire digital tech stack, providing everything from order management services to loyalty programs. The goal is to help restaurants increase sales and better engage with their customers while, at the same time, not lose a bunch of money in service fees.
In fact, since its launch in 2019, co-founder and CEO Nabeel Alamgir says Lunchbox has saved restaurants more than $35 million in third-party fees (and counting) — “that’s $35 million that went directly into restaurateurs’ pockets,”Alamgir told Built In. “That is what really matters. That’s why we got started.”
From Busser to C-Suite
For Alamgir, this mission is personal. After immigrating to the United States at 15 years old, he got a job working as a busser for Bareburger. Over the years, he worked his way up to become the company’s chief marketing officer, and expanded it to about 50 locations in the span of a decade.
“It was a grind. That was ten times harder than running this tech company. I just want to make sure all of those operators are being supported. Their job is extremely hard, and they’re constantly being left behind,” Alamgir said.
In the last two years, Lunchbox has grown quite a bit. It closed on a $20 million Series A led by Coatue back in October of 2020, and has since grown its team from 50 to 250 people.
Now, Coatue is doubling down on its investment, leading Lunchbox’s latest $50 million Series round announced Tuesday. Primary VC and 645 Ventures joined in on the round, as well as a group of executives from key industry players like DoorDash, sweetgreen and &pizza.
“The last three years have been very exciting for Lunchbox. We have been following them since 2019 and we have been continually impressed by Nabeel’s far-reaching vision,” Rahul Kishore, a senior managing director at Coatue, said in a statement. “We’re so proud of the team’s accomplishments and we’re looking forward to helping them scale and revolutionize the restaurant industry.”
The ‘Next Wave’ of Restaurant Tech
This news comes on the heels of a string of partnerships and acquisitions for Lunchbox. Just last week it teamed up with Virturant to create an all-new Ghost Eats App, which they predict will be the largest virtual restaurant and ghost kitchen marketplace when it launches next quarter. Before that, Lunchbox bought up Spread, an online marketplace that connects restaurants and diners. It also created a “digital food hall” through a partnership with C3, providing a place where guests can order food from multiple brands in one go.
Alamgir says these kinds of collaborations make up about a third of the company’s revenue right now, and he doesn’t foresee this more digital-first approach going away anytime soon.
“They are the next wave…that will expand and have an incredible digital presence and value that will not have any storefront,” Alamgir said, adding that this lack of storefront means Lunchbox’s ability to increase revenue and build a completely digital presence resonates even more. “These folks don’t have a storefront, so they don’t convert people who are passing by. They need to be a little more digital savvy.”
Going forward, Lunchbox plans to use this funding to grow its team, focusing especially on talent, engineering and marketing roles. Alamgir says the startup also plans to expand its “orbit” in terms of the kinds of restaurants it works with. Lunchbox mainly works with mid-market eateries right now with 10 to 100 chains, and he says it wants to work with smaller businesses, as well as larger ones with as many as 1,000 chains.
Down the road, Lunchbox plans to further innovate its product, too, pushing the boundaries of what it means to have a “digital storefront.” Alamgir even hinted at an upcoming metaverse concept, but details on that are slim for now. Until then, Alamgir says he would like Lunchbox to keep doing what it does best — saving restaurants money — and has plans to save the industry more than $100 million by the end of this year.