Taster raises $ 37 million as VCs remain bullish on food delivery
The CEO and founder of Taster Anton Soulier.
Venture capitalists continue to pile up on food delivery start-ups, backing them with hundreds of millions of dollars, even though margins are often low and people can increasingly visit restaurants. In Britain, people can already eat out in groups of six, and they will be able to dine inside from May 17.
Several food delivery businesses have exploded during the Covid crisis offering people a way to continue eating food from their favorite restaurants and avoid venturing into supermarkets.
London-headquartered Taster became the latest food delivery company to secure a major funding round, announcing on Thursday that it had raised $ 37 million from venture capital firms including Octopus Ventures, LocalGlobe, Battery Ventures and Heartcore Capital. He said he intended to use the money to expand in the UK, France and Spain.
Founded in 2017 by Deliveroo’s seventh employee Anton Soulier, Taster operates five digital restaurant brands for delivery only, including Korean fried chicken restaurant Out Fry, Vietnamese street food restaurant Mission Saigon and vegan burger brand. In Burgers. He claims a million meals were delivered by his brands last year and revenues have more than doubled, although he declined to share the revenue figures.
Foods from these brands can be ordered from take-out apps like Deliveroo, Uber Eats, and Just Eat Takeaway, as well as directly from Taster. But customers won’t necessarily know where they’re made. While traditional restaurants tend to use their own kitchen, or maybe even dark kitchen, Taster brands use kitchens that are not fully utilized in other restaurants and hotels. He says the staff in these kitchens are trained and their meals are relatively simple to assemble, with complex sauces and other items prepared before they are sent to the kitchens.
“The food category in general is barely online,” Soulier told CNBC Wednesday when asked why so much money is pouring into businesses like his. “It’s about 10%. When you look at other industries like travel, it’s like 60%.”
The French entrepreneur believes people are starting to realize that the internet switchover in the food industry has been sped up by Covid. “When I started in 2017, people were like, ‘What is this? I’m not going to invest in a restaurant business that I don’t understand.’ For this cycle, the discussions have been very different because people were quite aware of it. We’ve had a lot of interest from US venture capital funds. “
Governments around the world are keen to ease Covid restrictions and give their struggling economies a boost. French President Emmanuel Macron is reportedly planning to announce a relaxation of the rules in the coming days, while the Austrian capital of Vienna plans to ease restrictions next month. However, Germany this week put in place tough new lockdown rules that could last until June.
Elsewhere in the world, Australia and New Zealand have enjoyed the freedom of lifelong lockdowns in recent months except for a few instant locks, and many countries in Asia, including China, are also free of lockdowns, although the number of cases in India has skyrocketed in recent weeks.
Rebecca Hunt, an investor at Octopus Ventures, who led the investment, said in a statement that Taster’s proposal is “incredibly exciting.”
“This is the first digital food brand concept to evolve using a licensed partner model,” she said. “By partnering with existing food preparation experts to manage local kitchens, it can scale quickly while ensuring consistency in food quality, as well as operational efficiency. We firmly believe this will be a winning combination and Anton’s experience at Deliveroo gives Taster another unfair advantage. in this rapidly growing market. “
Taster has raised a total of $ 50 million to date and Deliveroo co-founder and CEO Will Shu is one of the company’s angel investors. He declined to share his current assessment.
Deliveroo itself raised £ 1 billion ($ 1.39 billion) when it went public on the London Stock Exchange earlier this month. However, the company’s share price has fallen to around £ 2.40 in recent weeks from £ 3.30, leaving many investors disappointed.
Amazon got more out of Deliveroo’s IPO than anyone else by leading a $ 575 million fundraising round in Deliveroo in May 2019 in exchange for a 16% stake. He sold around 23 million Deliveroo shares when it went public.
Elsewhere, the six-year-old Finnish Wolt announced in January that he had raised a $ 530 million funding round at an undisclosed valuation, bringing the total investment in the company to more than $ 856 million.
Grocery vs takeout
While many of the early food delivery companies focused on take-out, there are more and more people looking to deliver groceries from supermarkets and other stores to homes. And some, including Deliveroo and Uber Eats, are trying to do both.
There is also a new generation of entrepreneurs leaving the more established food delivery businesses to launch their own start-ups.
Two former Deliveroo employees raised $ 20 million for their 10-minute grocery delivery app called Dija in December, before launching it in London in March. He now plans to expand into Spain and France. There’s also London-based start-up Weezy, which raised £ 1million in pre-seed funding last August, and at least a dozen other on-demand grocery delivery start-ups across the ‘Europe.
Turkey’s Getir is an example of an app that tries to do both. The company, which was backed by venture capital billionaire Michael Moritz, announced last month that it had raised $ 300 million at a valuation of $ 2.6 billion. The money comes from Silicon Valley heavyweight VC Sequoia and New York hedge fund Tiger Global.