Taster, the London-based company behind a series of highly-popular digital restaurant brands, including the popular Korean chicken brand Out Fry, today announces that it has raised $37 million in Series B funding.
(*A digital restaurant is simply a restaurant that exists only to deliver via online orders and has no other route to market. A Deliveroo that delivers only from its own digital restaurant brands.)
The funding was led by Octopus Ventures with participation from Rakuten, as well as from existing investors Battery Ventures, Latitude (the global breakout fund of LocalGlobe) and Heartcore Capital.
The rise of online delivery platforms now makes it possible for restaurants and food brands to reach customers instantly. While the huge growth seen within food delivery is set to continue – the category is expected to be worth $180 billion by 2023 – only 10% of the food service sector is currently online, compared to 60% for the travel industry, with this figure expected to increase by an average of 30% per year through 2025.
Facing high fixed costs and declining footfall and volume, existing restaurants and chains are keen to participate in the delivery market to build their customer base and drive margins. However, they are often not set up for delivery, with menus that don’t travel well and lacking the technology & know-how to exploit this growing demand. As a result, existing professional kitchens are under-utilised, while the quality and consistency of meals delivered to customers can vary greatly. What’s more, global lockdowns have increased demand for food delivery options, exacerbating broader shifts in rising consumer expectations.
Taster has built a comprehensive digital restaurant platform, powered by innovative first-party technology and highly-scalable through a unique licensing model, which has enabled the company to rapidly launch a range of successful digital restaurant brands that offer high-quality meals and consistently excellent customer service. Founded in 2017 by Anton Soulier, one of the first employees at Deliveroo, Taster is based in London with teams in Paris and Madrid, and has over seventy digital restaurants in eleven European cities across the UK, France and Spain.
Over one million Taster meals were delivered in 2020, with the company’s revenues more than doubling in the last year. In Paris, Taster’s restaurants are now the third-largest by GMV (Gross Merchandise Value) on the Deliveroo platform, behind McDonald’s and Burger King.
Taster’s success and growth is founded on three key pillars:
Strong brands, designed specifically for delivery: Available to order across a range of popular food delivery platforms, as well as through Taster’s own iOS and Android app, Taster has collaborated with Michelin-starred chefs and some of the biggest personalities in the food industry to launch five digital restaurant brands – Korean fried chicken restaurant Out Fry, Vietnamese street food restaurant Mission Saigon, vegan burger brand A Burgers, Japanese comfort food restaurant Stacksando, and Taiwanese street food brand Bian Dang. 60% of Taster’s customers are repeat customers.
Powerful first-party technology: Taster has built a suite of tools including demand forecasting algorithms, a supply chain and quality control tool, an API bringing together orders from various delivery platforms, and its own iOS and Android app. Taster’s high-performance ecosystem uses data to track quality, drive performance and manage kitchens and supply chains, adding significant efficiency to food preparation and delivery and meaning a new digital restaurant site can be launched in as little as two weeks.
A unique and highly-scalable licensing model: Unlike ‘dark kitchen’ players who use purpose-built delivery kitchens, Taster works with a network of handpicked partner restaurants to operate its digital brands. Restaurants with under-utilised kitchen space – ranging from larger hospitality kitchens to independent operators – can partner with Taster to license, launch and operate one or more of Taster’s digital restaurant brands from their kitchens, benefiting from large delivery volumes, economies of scale and PR & marketing support without having to overhaul their existing space. Partner restaurants typically generate an average of $7,000 in turnover from the first week of launch, with a net margin of between 15 and 20%.
Anton Soulier, co-founder and CEO of Taster said: “If McDonald’s or Burger King were to launch today, they would do so in a radically different way to how they did in the 20th Century. Back then, consumers wanted to eat ‘fast and cheap’; in 2021, they want to eat ‘fast and well’.
“At Taster, we want to redefine what it means to be a restaurant group in the 21st century; by combining strong brands, innovative technology and a model that works for restaurateurs and customers alike, we are proving that it is possible to quickly launch and scale popular food brands that don’t compromise on quality, customer experience or pleasure.
“We couldn’t be happier to announce today’s funding, which will enable us to reach as many people as possible with our food brands and will help us make our platform available to even more restaurateur-entrepreneurs looking to accelerate their incomes.”
The investment will be used to increase Taster’s presence across the UK, France and Spain and drive rapid expansion into new cities – the company will be present in 40 cities by the end of 2021 – as well as to support the launch of two new consumer brands this year. Taster aims to have 10,000 digital restaurants live globally by 2025, across 3,000 licensed partner restaurants.
Rebecca Hunt, investor at Octopus Ventures, who led the investment, said: “Taster’s proposition is incredibly exciting. From the food itself, to the packaging and online experience, everything is designed specifically for the take-away customer, resulting in a far superior experience and very high levels of repeat business. It’s also the first digital food brand concept to scale using a licensed partner model. By partnering with existing experts in food preparation to run local kitchens, it can scale rapidly while ensuring consistency of 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.”
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Hospitality & Catering News: Taster’s digital restaurant brand growth fuelled by $37 million investment. – 29 April 2021 – Taster’s digital restaurant brand growth fuelled by $37 million investment.
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