Food Tech Media Startup Funding, M&A and Partnerships: October 2014

This monthly column highlights the most interesting acquisitions, financings and partnerships within the Food Tech & Media ecosystem – digital content, social, local, mobile, grocery, e-commerce, delivery, ordering, payments, marketing and analytics – to give you insights into the latest funding and growth trends.

Food tech funding, M&A and partnership activity was robust in October with eight acquisitions and twelve financings, however, with a majority of deals at the seed stage and all acquisition amounts undisclosed, the sector only reported an influx of $32.3 million for the month.  Restaurant technology definitively paved the way, with fifteen out of the twenty deals having to do with ordering, delivery, reviews or other restaurant functions. As we have seen in the last few months, there were a significant number of international transactions, particularly in M&A.

The usual suspects among the broader incumbents in the space continued to make headlines throughout the month. Groupon put its acquisition of SnapSaves to use by launching Snap – a new app that gives customers cash back when they buy certain items at the grocery store. Groupon also decided to go up against Yelp and Google by introducing Pages, an online directory that will give businesses their own home page on Groupon’s site, where offers, news, user reviews and other information will live.

Google upgraded its app to integrate restaurant reservations (through a partnership with OpenTable), while also expanding its Express delivery service to compete with Amazon, and Amazon Fresh. And as online grocery shopping barriers continue to dissolve, even more players are entering the market. For example, Overstock.com (!?) is a surprising new entrant to the sustainable agriculture movement, with its recently unveiled locally-focused Farmers Market.

M&A

Heartland Payment Systems Acquires Xpient Solutions. The Charlotte, NC enterprise-level restaurant POS software service will extend Heartland’s core payments capability into a complementary market. Xpient is primarily a point-of-sale software solutions provider for the food service industry, with Applebee’s, Panera, Taco Bell, Arby’s, Wendy’s and IHOP as some of the hospitality franchises as clients. Following the acquisition, Xpient’s platform will remain open to other processors.

Announced: 10/31/14  Terms: Not Disclosed  Previous Investment: Not Disclosed  Founded: 2004

Wix Acquires OpenRest. The Tel Aviv, Israel- and Wilmington, DE-based restaurant ordering startup will expand the Wix portfolio of small business offering by enabling restaurant owners to create online ordering websites, mobile websites and native mobile apps. According to the release, OpenRest’s integration into the Wix platform will enable restaurant owners to take orders directly from their Wix websites and native mobile apps, and will lay the groundwork to launch a complete online business management solution for restaurants during 2015.

Announced: 10/29/14  Terms: Not Disclosed  Previous Investment: Not Disclosed  Founded: January 2011

Yelp Acquires Cityvox.  The acquisition of the French restaurant and nightlife reviews site “further illustrates Yelp’s commitment to the development of the European market and clearly underlines our goal of becoming the go-to local business review site internationally,” said a blog post from the company. Yelp says it’s integrating Cityvox’s reviews and photos into its own platform, however it is unclear if Cityvox, which was a subsidiary of French telecom giant Orange, will remain as a standalone entity.

Announced: 10/29/14  Terms: Not Disclosed  Previous Investment: Orange Telecom acquired the company for approximately $46m in 2008  Founded: January 1999

Yelp Acquires Restaurant-Kritik. The Hamburg, Germany-based restaurant review site will further expand Yelp’s presence in Europe, as it has more than 330,000 reviews of 94,000 eateries in Germany.

Announced: 10/24/14  Terms: Not Disclosed  Previous Investment: Not Disclosed  Founded: Not Disclosed

iFood Acquires Papa Rango and Alakarte. Brazil-based iFood, which recently merged with the Brazilian business of UK-based Just Eat, brings eighteen new cities into its network with these two Brazilian restaurant delivery acquisitions, and expects to add over 50 thousand orders per month, bringing its total orders per month to over 400,000.

Announced: 10/23/14  Terms: Not Disclosed  Previous Investment: Not Disclosed  Founded: Papa Rango – Jan 2013; Alakarte – Not Disclosed

Lightspeed Acquires POSIOS. The Ghent, Belgium-based cloud-based mobile POS-startup will help Lightspeed enter the food service vertical and expand internationally. According to Street Fight Mag, Lightspeed is bringing on much of the team to help guide the restaurant product, and help the firm expand into European markets. Street Fight also notes that this deal underscores the potential for consolidation within a small business software segment that has seen an intense influx of capital and redrawing of product lines.

Announced: 10/22/14  Terms: Not Disclosed  Previous Investment: Not Disclosed  Founded: July 2011

Delivery Hero Acquires Subdelivery. The Sao Paulo-based food delivery service, which has an exclusive contract for delivering Subway’s sandwiches and products in Brazil, will help Delivery Hero expand its reach in Latin America. Delivery Hero has now acquired five companies since early June.

Announced: 10/13/14  Terms: Not Disclosed  Previous Investment: Not Disclosed  Founded: January 2012

OrderUp Acquires Back Forty. The Baltimore-based online food ordering and delivery service acqui-hired the five-person development team of Back Forty, a small technology consulting firm in Baltimore. OrderUp was previously one of the tech firm’s 10 clients.

Announced: 10/02/14  Terms: Not Disclosed  Previous Investment: Not Disclosed  Founded: June 2012

FUNDING

GourmetItUp Raises ~$300k. The Mumbai, India-based online platform for gourmet cuisine partners with top fine-dining restaurants in India to create exclusive dining experiences like set meals, wine tastings and bespoke menus which are available on the site as well as through concierge services, credit cards, banks and corporate partners. Restaurant partners in Mumbai include Hakkasan, Yauatcha, Le Pain Quotidien and The Tasting Room. According to VC Circle, GourmetItUp plans to use the funds to expand its operations in India and globally. A part of the capital will go into deeper technology integration with its restaurant partners, besides ramping up its customer acquisition activities.

Announced: 10/27/14  Stage: Seed  Participating Investors: Angels  Previous Investment: Not Disclosed  Founded: 2012

MOGL Raises $11m. The San Diego-based rewards and loyalty app allows users to gain cash-back rewards for spending money at partner restaurants and also provides the option to donate rewards to a fundraiser or transfer rewards into points toward airline flights, hotel stays and more. In covering the raise, Xconomy further details the shift in the company’s business model, including offering more flexibility to restaurant in varying the size of their rewards during peak and off-peak hours, and rather than charging restaurants a percentage of each tab, MOGL now charges a flat monthly rate. The company plans to use the new funding to expand beyond its existing market of six cities into 14 additional metro areas—including New York, Boston, Houston, and Chicago.

Announced: 10/24/14  Stage: Venture Round  Participating Institutional Investors: Avalon Ventures, Sigma Partners, Austin Ventures, Sysco Ventures, Correlation Ventures  Previous Investment: $15.5 million  Founded: January 2010

La Belle Assiette Raises $1.7m. The Paris, France-based private chef marketplace offers consumers the ability to order chef-prepared food delivery or schedule a chef to come to their home or event. The service is currently available in France, the U.K., Belgium, Switzerland and Luxembourg. The company will use the funds to build up its development and marketing teams, expand sales and marketing efforts and continue to grow internationally.

Announced: 10/20/14  Stage: Seed  Participating Institutional Investors: Kima Ventures  Previous Investment: $500k  Founded: 2012

Nara Logics Raises $6m. The Cambridge, MA-based artificial intelligence platform is most known for its personalized hotel and restaurant recommendation engine. However the company recently launched Naralogics.com, its platform-as-a-service for providing personalization on demand. Nara’s platform helps businesses provide relevant content and experiences to customers through Big Data aggregation, synthesis and analytics; it also enables website, email and mobile personalization. The company plans to use the funds to further productize the platform, making it easier for businesses to get started using the technology to improve their business. FinSMEs.com features an interview with Nara’s president, which further details the company’s strategy and growth plans.

Announced: 10/15/14  Stage: Series A2  Participating Institutional Investors: .406 Ventures (lead)  Previous Investment: $6.8 million  Founded: 2010

Drop Raises $2m. The San Francisco, CA- and Dublin, Ireland-based interactive recipe platform combines an iPad-connected kitchen scale with recipe content via an app. As the scale senses an ingredient has been added to the bowl, bakers are automatically guided through hundreds of recipes – from simple cookies to more complex pastries and pastas. The company plans to use the funds to build out its engineering, customer support and community teams, while increasing its marketing activities.

Announced: 10/14/14  Stage: Seed  Participating Institutional Investors: Frontline Ventures (lead), Innovation Works (lead), PCH, VegasTechFund, WI Harper Group  Previous Investment: Not Disclosed  Founded: 2012

Monsieur Raises $2m. The Atlanta, GA-based developer of a robotic bartending system consists of three components: a beverage-dispensing machine capable of 150 drinks without refilling; a mobile app available on Android and iOS; and an online app used to manage and monitor machines. The system, which is currently on pre-order and available in tabletop and kiosk sizes, will reportedly be launched in several NBA arenas around the U.S. this season, and has beta units deployed in several restaurants and bars in Atlanta. The company intends to use the funds to accelerate product development and add resources in engineering, operations, sales, and marketing.

Announced: 10/10/14  Stage: Seed  Participating Institutional Investors: BIP Capital (lead), Base Ventures, TechSquare Labs  Previous Investment: Not Disclosed  Founded: January 2012

Morsel Raises $800k. The Chicago-based social media network and food media property aims to “engage food lovers, chefs, mixologists and other restaurant industry types in a conversation around the food and drinks they love”. The emphasis will be on fine dining, and the site will host a combination of curated content from chefs, as well as posts from members.

Announced: 10/07/14  Stage: Seed  Participating Institutional Investors: Merrick Ventures, Chicago Ventures, Matt Maloney (CEO, Grubhub)  Previous Investment: Not Disclosed  Founded: 2013

EatStreet Raises $4m. The Madison, WI-based online and mobile food ordering service EatStreet, which raised the initial $6m Series B in April 2014, intends to use the funds to further develop its iOS and Android apps, expand into new markets, and double the engineering team. The company also integrates into the Yelp Platform, where online users can order food directly from restaurant pages on Yelp and orchestrates digital loyalty programs with its restaurants where diners can earn coupons.

Announced: 10/07/14  Stage: Series B-1  Participating Institutional Investors: 4490 Ventures, State of Wisconsin Investment Board  Previous Investment: $8.0 million  Founded: January 2010

Phoodeez catering raises $600k. The Boston, MA-based corporate catering concierge platform caters events and luncheons by organizing and supplying food from multiple local restaurants. As detailed by BetaBoston, Phoodeez charges clients to manage their catering, while restaurants pay monthly fees for the extra revenue Phoodeez brings in. In addition, Phoodeez receives volume discounts on restaurant food but can charge regular menu prices on its website, enabling the company to turn a profit on every dish. The company intends to use the funds to grow operations and expand the team.

Announced: 10/06/14  Stage: Seed  Participating Institutional Investors: Project 11  Previous Investment: Not Disclosed  Founded: 2012

Sourcery Raises $2.5m. The San Francisco-based online wholesale food supplier director and payments processor connects buyers and suppliers while streamlining ordering, delivery, pricing and payment processes. According to VentureBeat, Sourcery helps about 30 percent of its customers find new suppliers and that the directory side of its business is an area it will be investing more resources in. The company will use the funds to expand its platform into new markets including Los Angeles, Portland, and New York City.

Announced: 10/03/14  Stage: Seed  Participating Investors: Joe Lonsdale, Adam Pisoni, David Tisch, Adam Rothenberg, Shinya Akamine, Jeff Epstein  Previous Investment: Not Disclosed  Founded: 2012

LimeTray Raises Undisclosed Series A. The New Delhi, India-based restaurant technology startup provides restaurants with a platform to run day-to-day operations including ordering, online presence management, and CRM.

Announced: 10/1/14  Stage: Series A  Participating Institutional Investors: Matrix Partners India Previous Investment: Not Disclosed Founded: 2013

Hello Nature Raises $1.4m. The Seoul-based online grocery retailer offers compact package delivery service called ‘nature-friendly grocery shopping’. The service sorts, packs, and delivers portions of fresh groceries that better serve individuals and smaller households.

Announced: 09/29/14  Stage: Seed  Participating Institutional Investors: Mirae Asset Venture Investment, Softbank Ventures Korea  Previous Investment: Not Disclosed  Founded: January 2012

PARTNERSHIPS

Zuppler and LevelUp Partner to Launch Restaurant Mobile Apps. The partnership combines mobile payment and in-app ordering into a single mobile experience.

Blue Apron and Bravo Media Partner to Bring Fans a “Top Chef” Cooking Experience at Home. The partnership allows Top Chef fans across the country the opportunity to cook the winning dish from the season premiere.

Food+Tech Connect Partners with ShopKeep to Offer Support for Restaurant Growth Boot Camp. The partnership with ShopKeep provided 25 full scholarships to The Power of Brand: Growing Your Restaurant, taught by former Union Square Hospitality Group CMO Felicia Stingone.

Greenling Partners with Instacart for New Delivery Service. Previously, Greenling delivery orders needed to be filed directly through the company at least a day ahead of time. The partnership leverages Instacart, which can pull from a network of 300 local, personal shoppers, to fill those orders through Greenling’s South Austin warehouse in an hour.

INDUSTRY LANDSCAPE

As The Food Tech & Media ecosystem continues to see rapid change, Rosenheim Advisors created The Food Tech & Media Industry Map to help entrepreneurs, participants and investors understand this quickly evolving landscape. Let us know about your recent or upcoming funding, partnerships or acquisitions here.

Check out the 2013 Annual Report and last month’s round-up.