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Technology

Commission-free delivery startup Sesame raises $3.4M

Distributor Gordon Foodservice is among the investors in the New York company.
Melt Shop food
Photograph by Briana Balducci

A New York startup wants to disrupt food delivery by charging restaurants zero commissions.

Sesame is a delivery marketplace along the lines of DoorDash and Uber Eats. But unlike those companies, it charges restaurants a flat monthly rate of $125 for its services, rather than taking a cut of each order, which it says makes delivery more profitable for operators.

Sesame does not actually do the delivering, however. It partners with the Relay delivery service to handle the last-mile logistics, and restaurant can also use their own drivers. It's up to restaurants to cover the costs of that by charging customers a delivery fee.

The model caught the attention of investors, who seeded Sesame with $3.4 million in a round announced Wednesday. Contributors include Relish, the venture arm of big restaurant distributor Gordon Food Service.

It will use the funding to continue developing its technology as well as expand in the New York metro area.

Sesame was founded by Josh Morgan, a restaurateur with management experience at Hillstone Restaurant Group and the NoMad in New York City. He is now an operating partner with Aurify Brands, the operator of franchised Five Guys units in New York and the owner of such fast-casual concepts as Le Pain Quotidien and Melt Shop.

Sesame's mission is "empowering independent restaurants to regain control of their off-premise business and put dollars back into their pockets," Morgan said in a statement. "The current delivery ecosystem is broken and we are excited to bring a more sustainable solution to as many restaurant owners as possible."

Third-party delivery companies typically charge restaurants anywhere between 15% to 30% per order, depending on the extent of service they provide.

In addition to collecting a flat rate, Sesame also gives restaurants access to customer information—another sticking point between restaurants and the big third-party delivery providers.

Sesame's marketplace is live but currently in a testing phase. It works with about 25 brands in Manhattan, including Aurify concepts Melt Shop and Little Beet and other small chains like Juice Press, Sticky's The Finger Joint and Bareburger. It has more than 200 businesses on a waiting list, it said.

Consumers pay a $3 "Sesame fee" on every order and collect "impact points" that they can donate to charities. Orders also include a delivery fee that goes to the restaurant.

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