A new investment fund wants to help cut through the noise of the fragmented restaurant technology market by matching promising tech firms with emerging dining concepts.
The Chicago-based Emerging Fund launched in March and has raised $52 million so far with contributions from 34 restaurant and tech CEOs and founders. They include FB Society founder and CEO Randy DeWitt; Puttshack and Flight Club co-founder Adam Breeden; Chowly founder and CEO Sterling Douglass; Avero founder and former CEO Damian Mogavero; and many others. Emerging hopes to offer its investees not only capital but also guidance from its roster of experts.
The group is part of Emerging, a company that works with restaurants across the country on supply chain, real estate, revenue and financing and relies heavily on data to make decisions.
As Emerging founder and CEO Mathew Focht watched the restaurant technology market get bigger and more complicated over the past several years, he thought the company might be able to act as a sort of traffic cop at the intersection of tech and restaurants.
“If you’re an operator, you get beat down by restaurant tech companies every day,” Focht said. And if you’re a tech company, “it’s really, really challenging to get in front of the decision-makers” at restaurants.
“We want to help those founders that really have built great products and give them a platform to get scale,” he said.
The fund will look for companies in both the tech and restaurant worlds that have a proven product and strong unit economics. It will then use its resources and network to help them go to market.
Here’s how that might work on the tech side: Emerging identifies an innovative tech product that has not yet gained a foothold in restaurants. Its lending partners vet the product and decide its legit. The fund then puts it in front of some of the more than 1,000 chains it works with (including innovators and “influencers” like Puttshack and FB Society) to see if any of them would be interested in trying it. From there, it builds a case study and continues to help finance and grow the technology.
In that sense, Emerging is not a typical venture-capital firm that will make dozens of bets in hopes of winning a couple, Focht said. Nor is it a private equity firm intent on cutting costs in order to profit from its investments. “We look at ourselves as growth capital and growth equity,” Focht said. “There’s this huge gap that we see, that really great groups are out there … that need a strategic partner to give them critical mass and scalability.”
Emerging met one tech firm during the FSTEC conference earlier this month that it plans to roll out with a few operators in the coming weeks, Focht said, though he declined to name the company. It's also eyeing an investment in Tablz, an app that allows restaurants to sell reservations to their most popular tables.
Emerging will also look to invest in restaurants, particularly small, experiential brands like existing clients Puttshack and Flight Club and co-founder Breeden's latest concept, London-based F1 Arcade. In June, Emerging invested $5.6 million in F1, which combines auto-racing simulators with food and cocktails. It’s also looking at a baseball-focused eatertainment brand, Focht said.
Emerging Fund is still raising money and has a goal of reaching $100 million.
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