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Starbucks takes a stake in a tech company

The coffee chain is sharing technology with Brightloom, formerly known as Eatsa, which also raised $30 million.
Photograph courtesy of Starbucks Corp.

Starbucks Corp. said Monday that it has agreed to license some of its technology to the company formerly known as Eatsa and is taking an equity stake in the business.

The announcement came as Brightloom, as Eatsa is now known, announced its name change, and amid a $30 million funding round from Tao Capital Partners and Valor Equity Partners and Starbucks licensees, including Alshaya Group and Alsea.

Brightloom will use the funds to further develop its software and integrate Starbucks technology into a “comprehensive technology suite.”

Brightloom is combining key components of its own platform with elements of Starbucks’ “digital flywheel technology,” including its mobile ordering and loyalty programs.

Brightloom will then make the technology available to Starbucks license partners around the world, and to other restaurant companies. Starbucks said it would continue to drive the development of its digital flywheel for its company-operated markets.

Kevin Johnson, Starbucks’ CEO, said in a statement that the partnership would “drive a broad innovation agenda that extends relevant customer experiences from brick-and-mortar to a digital-mobile customer connection.”

“At Starbucks, we have experienced firsthand the power that comes through digital customer connections that are relevant to the customer,” he added. “The results we’ve seen in customer loyalty and frequency within our digital ecosystem speak for themselves, and we’re excited to apply these innovations toward an industry solution that elevates the customer experience across the restaurant industry.”

It’s the latest in a series of investments by large restaurant chains into technology companies as they seek to get a leg up on competitors as more transactions in the business are done digitally.

Such deals include McDonald’s $300 million acquisition of drive-thru technology company Dynamic Yield and the purchase of QuikOrder by Yum Brands’ Pizza Hut, as well as Yum’s investment in delivery and online ordering company Grubhub.

Brightloom began as Eatsa, a restaurant chain that used kiosks and a cubby-based delivery system that promised to revolutionize the industry. But it ultimately abandoned plans to create a national chain and instead evolved into a restaurant technology company.  

With the Starbucks deal, Brightloom will be able to integrate Starbucks’ digital flywheel technology into its own system to provide restaurants with a “one-stop shop” for mobile, payment, order management, loyalty, personalization and customer relationship management.

The company said the technology will be designed to simplify the customer process, from the time of order and payment to the kitchen, pickup and in-store experience with digital rewards and offers.

“We are confident that the digital flywheel strategy is the best way for brands to enhance and build their customer relationships,” said Adam Brotman, Brightloom’s CEO, who joined in April. Brotman came to the company from J. Crew but had previously been Starbucks’ chief digital officer.

“The fact that we will now be combining our platform with the leading digital flywheel software in the world, Starbucks, perfectly positions us to offer the best-in-class solution to the industry.”

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