Tech Roundup: Crave ghost kitchen gets $7.3M, delivery companies pass the buck

It was a head-spinning week for delivery, but at least one ghost kitchen came out a winner.
Photograph courtesy of Crave Hospitality

This week in restaurant tech: Another ghost kitchen provider raises millions, delivery fees see-saw and more.

Crave’s fundraise

Crave Hospitality Group, a Boise, Idaho-based ghost kitchen provider, has raised $7.3 million in seed funding, the company announced Wednesday.

The round was led by venture capital firm StageDotO and also included investment firm and real estate developer Capital Eleven.

Crave said it will use the funds to build pre-opening teams for four new Crave Collective facilities slated to open next year. It has plans to grow across the country, with 10 additional locations in the works for 2022. Target markets are Salt Lake City and Provo, Utah;
Dallas-Fort Worth; Mesa and Chandler, Ariz.; and Denver.

The company’s unique model promises end-to-end service for restaurant partners, from a proprietary tech stack to a dedicated team of delivery drivers. Guests can order from multiple concepts via Crave’s app and have them delivered together.

Its Boise facility opened in November with seven chef-driven concepts and a total of 14 set to launch by the end of the year.

Delivery fees go down ...

A handful of cities and counties approved caps on the fees third-party delivery providers charge restaurants this week, and at least one large city is considering doing the same.

In Albany County, N.Y., a 15% cap on delivery fees goes into effect Friday thanks to an executive order from County Executive Dan McCoy. In California, both Santa Clara County and San Jose approved 15% caps on delivery fees; San Jose’s measure limits total fees to 18%.

Officials in Baltimore are considering a similar cap that would limit all fees—delivery and marketing—to 15%. 

The caps, now in places in dozens of cities, counties and one state, are intended to help restaurants struggling during the pandemic.

... and up ...

In response to caps in Denver and Chicago, DoorDash raised delivery fees for consumers, by $2 and $1.50, respectively. 

Delivery companies have warned that the fee caps would force them to pass the cost of delivery to consumers, and DoorDash is now doing just that. The test will be how much consumers are willing to bear price hikes on an already expensive service.

Meanwhile, in California, DoorDash and Uber Eats raised customer fees to help pay for employee benefits mandated by Proposition 22, approved by voters in November.

... and down

In a swipe at its fee-hiking competitors, Grubhub began offering its Grubhub+ subscription service for free through mid-March in New York and Chicago. Restaurant partners in those cities will also be automatically added to the service at no charge.

It’s an aggressive play to promote Grubhub+, which gives diners unlimited free delivery on orders over $12 from participating restaurants, along with other perks.

ArrowStream’s new owner

The large supply chain management software provider was sold by its owner, buyout firm Diversis Capital, to private-equity firm Tailwind Capital. 

Diversis acquired ArrowStream from its founders in 2017 and helped grow its presence in the foodservice industry. Chicago-based ArrowStream now works with more than 250 restaurant chains, including Subway, Wendy’s and Shake Shack, along with 1,000 distributors and 8,000 suppliers.

Terms of the deal were not disclosed.

DoorDash’s driver accommodations

One occupational hazard of delivery that often gets overlooked: It can be hard to find a place to use the restroom on the job. DoorDash this week made it easier for its drivers in New York to do that by working with 200 restaurants in the city to make their restrooms available to Dashers. The company also said it’s working with city officials to find other solutions to bathroom access. 

It was part of several steps the company is taking to improve working conditions for drivers in the Big Apple, including emergency assistance, improved navigation options for bike couriers and free or discounted road safety equipment.

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