Food Ordering Startup Raises Funds as Restaurants Adopt Takeout

(Bloomberg) -- Allset, a service which lets customers pre-order at restaurants, closed a series B funding round as the Covid-19 pandemic has forced many U.S. restaurants to try to adapt to a takeout-only model.

The Los Angeles-based company raised $8.25 million, valuing it at more than $55 million after the investment, Chief Executive Officer Stas Matviyenko said in an interview. It’s now raised $16.6 million to date.

The global restaurant industry, where the majority of establishments are independently owned, is facing unprecedented challenges caused by the pandemic that have led to closures and massive layoffs.

Allset said it will provide a support budget to help local restaurants, including waived service fees if they provide contactless pickup for customers.

Of the 2,500 restaurants on Allset’s platform, more than 30% have closed in the past two weeks until further notice, Matviyenko said. He expects about 65% of these restaurants will re-open after the pandemic is over. The service is getting three times more inbound inquiries from businesses trying to adapt and stay afloat.

The two biggest U.S. cities New York and Los Angeles, which are also Allset’s major markets, started limiting restaurants to take out and delivery orders a few weeks ago.

“We see a lot of new users and restaurants signing up which indicates people are looking for safe ways of getting food from restaurants,” Matviyenko said.

For the week ending March 22, full service restaurants struggled to quickly convert to off-premise modes and customer transactions dropped by 71%, NPD said. Womply, a data and software company serving small businesses, said that weekly revenue at restaurants was down around 69% in California and New York.

Allset, which partners with restaurants in mostly business districts, lets customers pre-order their meals and skip the line when they pick it up themselves, a feature popular among office workers, most of whom have been at home since mid-March.

The company has since tried to shift its business toward residential areas. It has been competing with companies Grubhub and other services that also offer contactless pickup.

Orders on Allset’s platform dropped 60% week of March 16, when some city lockdowns were imposed, compared to the week before, but saw a 10% boost the week of March 23.

“Food pre-ordering space is growing very fast, with only a few startups focusing on the pickup model,” said Maria Barsuk, Venture Capital Investment Programme at the European Bank for Reconstruction and Development, which led the funding round.

Existing investors including Andreessen Horowitz and Greycroft also participated in the round.

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