Slowdown tests the value of in-store retail and restaurant technology
Data Snapshot is a regular AFN feature analyzing agribusiness technology market investment data provided by our parent company, AgFunder.
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Retail and in-store dining technology was the fourth most funded category in 2021, with startups grossing $4.2 billion across 374 deals, according to AgFunder’s 2022 AgriFoodTech Investment Report. This is an increase from $2.4 billion in 2020.
AgFunder’s In-Store Retail & Restaurant Tech category includes technologies such as shelf-stacking robots, 3D food printers, point-of-sale systems and food waste monitoring systems. Startups in the category serve restaurant or retail environments, and sometimes both.
Best in-store retail and restaurant tech deals in 2021
The best deals for 2021 reflect the technologies and trends that developed immediately after the global Covid-19 lockdowns in 2020: cloud-based systems to manage shipping, labor and inventory, tools to make restaurant orders and payments more efficient, and some Infrastructure deliveries.
Retail analytics company Trax, which makes a cloud-based, computer vision-equipped monitoring system for retail environments, has won the biggest contract in the category with its E-Series tower. of $640 million led by SoftBank Vision Fund 2 and BlackRock.
Online cannabis dispensary Dutchie won two of the top rounds in 2021: a $200 million Series C followed by a $350 million Series D.
Restaurant POS system SpotOn also landed two rounds in the best deals, with a Series D round of $125 million followed by a Series F raise of $300 million.
Lunchr (now Swile), Sundayapp, and Fetch Rewards offer services around corporate food ordering, QR code payments for restaurants, and digital rewards for restaurants/groceries, respectively.
The times have changed
Retail and restaurant management software continues to be valuable for businesses struggling with labor and supply chain issues, as well as the impact of inflation on the cost, for example, of basic ingredients. As the old saying goes, if you can measure it, you can manage it. Platforms like those from Trax or SpotOn can give businesses valuable insight into their operations at a granular level, which can in turn inform decisions about inventory, staffing, and procurement.
However, not all of the companies in the best deals of 2021 above are doing so well right now. For example, Sunday recently downsized and exited 60% of its markets amid numerous other layoffs and restructurings in the restaurant technology sector. Dutchie cut 8% of its staff of 700, citing “a radical change in the market”.
This shift, of course, is the current economic downturn we find ourselves in. VCs are currently more conservative with their capital, and many are urging startups to make cuts to survive. In retail and restaurant technology, as in other industries, that survival will depend on the long-term value a technology can bring to its customers.