Photo: ChowNow
ChowNow, a food ordering platform company, announced it has raised $21 million in Series C funding from private equity firms 3L Capital and Catalyst Investors. And 3L Capital co-founder and managing director Shawn Colo is joining ChowNow’s Board of Directors in conjunction with this funding round.
Including this round of funding, ChowNow has raised $60 million. Steadfast Capital, Upfront Ventures, and Bonfire Ventures were some of ChowNow’s previous investors.
Launched in 2012, ChowNow essentially offers a white label platform that enables independent restaurants to set up online food ordering systems through their own websites, apps, and social media accounts, according to VentureBeat. And now ChowNow offers its own ordering portals on the web and mobile devices.
Now ChowNow powers the online ordering systems for more than 11,000 restaurants across North America. And it is seeing about $1 billion worth of revenue being generated through its platform.
The online food industry is heating up as Uber went public today and a large portion of its revenue comes from Uber Eats. And Postmates is preparing to go public after raising $700 million. Plus Ezcater recently raised $150 million at a $1.25 billion valuation.
ChowNow primarily focuses on food collection, but it also supports delivery services. And rather than charging a commission per order, ChowNow generates revenue from monthly fees that start at $99. And ChowNow provides customer data to its partners rather than keeping it all to themselves. Through ChowNow, customers can also place orders via Instagram, Facebook, and Google
“Local restaurants are often the heart of neighborhoods and there should be a way for them to stay competitive and profitable,” said ChowNow co-founder and CEO Christopher Webb. “We’re interested in giving these small businesses the tools they need at a fair price so they can focus on doing what they do best.”
This model can be tough on restaurants where the average profit margin hovers at about 6%. And some restaurants actually lose money on orders that are placed through those types of apps.
ChowNow also unveiled a new website called OrderBetter.com — which is aimed at educating consumers about the predatory tactics involving delivery app businesses.
The homepage of the site says: “Takeout shouldn’t take out the neighborhood. Surging fees from third-party food delivery apps are proving unsustainable for independent restaurants.” Many of the third-party delivery apps take up to 40% of every order placed and they own the customer data.
“A billion dollars in orders directly benefiting local restaurants is huge — especially to independently-owned operations like ours,” added Nate Pollak — who is the owner of The American Grilled Cheese Kitchen. “That’s our lifeblood, and ChowNow is a true partner in helping restaurants like ours thrive.”
