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Tech roundup: Ghost kitchens get their own fintech startup

Ghost Financial is offering loans and credit cards for ghost kitchen operators, raising questions about the sector’s financial stability. Also, a hiring app raises $7 million, DoorDash courts college students and more.
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In a sure sign of ghost kitchens’ establishment as a distinct restaurant sector, a startup has emerged to offer operators financial products like loans and credit cards.

Ghost Financial “emerged from stealth” (i.e., made itself publicly known) last week behind a $2.5 million funding round. The company was founded by serial tech entrepreneur John Meyer and bills itself as a “comprehensive financing and business services platform” for ghost kitchens, which, it points out, are expected by some measures to be a $1 trillion business by 2030.

The company’s first product is a credit card that gives operators 1% back on inventory expenses and also makes them automatically eligible for a loan to help open more locations.

But wait. Aren’t ghost kitchens supposed to be the more affordable, more profitable way to open a restaurant? Why the need for all the financial support?

Well, Meyer has some experience running a ghost kitchen, and it’s apparently not as lucrative as you might have heard. In late 2020, he opened his own delivery-only concept in Austin called Keto Kitchen, and while it was successful, he learned that margins are just as thin as restaurants (about 5%) and that operators tend to pay for a lot of big expenses with cash. Meanwhile, they lose up to 40% of their revenue to delivery apps. Turning to a bank for help isn’t really an option, he said, because most banks don’t even know what ghost kitchens are.

“At Ghost Financial, we are leading with empathy—not our pockets—to create a truly independent financial and banking backbone for the restaurant and fast-growing ghost kitchen industry,” Meyer said in a statement. “That means: building a friendly financial partner that isn’t the landlord and isn’t the delivery app.”

For what it’s worth, independent restaurants have long faced similar problems getting financing from traditional sources. (Their challenges navigating the Paycheck Protection Program are just one example.) In response, tech suppliers like DoorDash and Toast have started expanding their offerings to include financial products like cash advances and loans.

Ghost Financial is the latest to join this pool, with a focus on ghost kitchens in particular, though it said it would work with restaurants too. And while it might be a tempting lifeline for startup restaurants, it makes me a little nervous. Ghost kitchens are intended to supplement existing restaurants. If yours is losing money or you need to take out a loan to open one, you might want to rethink the idea entirely.

Landed raised $7 million for its hiring technology. Landed’s app helps automate the recruitment process for restaurants and workers. It has grown quickly over the past year, it said, increasing revenue by more than 20X since the beginning of 2021. More than 150,000 workers and hundreds of restaurants use its app, according to the company. It plans to use the fresh capital to add more users and develop new products. The seed funding was led by Javelin Venture Partners and Blockchain Capital.

DoorDash is offering a special subscription program for college kids. DashPass for Students offers unlimited free delivery and other perks for $4.99 a month, which is half the price of a regular membership. According to the company, college students are heavy delivery users: 70% of them order from a third-party provider in a typical week, at an average of four times a week. It should help DoorDash add to its coveted subscriber base. The company has said DashPass members order more food more often.

Virtual Dining Concepts unveiled a new virtual brand with celebrity chef Robert Irvine. Robert Irvine’s American Heroes will offer hot and cold hero sandwiches as well as sides and brownies for delivery only. A portion of the proceeds will benefit the chef’s Robert Irvine Foundation that supports military service members. Restaurants can partner with Virtual Dining Concepts and prepare the brand from existing kitchens. It’s the company’s thirteenth brand, joining MrBeast Burger, Barstool Bites and others.

Nextbite hired a chief concept officer. Lara Hoyem spent nearly 15 years at Shutterfly, where she most recently managed the company’s photo book product line. She will bring that digital business experience to the virtual brand provider, leading new brand development, consumer marketing and other strategy. She’s the latest addition to Nextbite’s growing executive team.

GoTab hired its first CFO. Mike Dunn comes to the tech provider from software company Cadmium, where he was CFO for two years. He has held the same title at several tech companies over the past 17 years. At GoTab, he will be responsible for helping to scale the business and managing relationships with financial partners. GoTab offers mobile ordering and payment tools.

PopID is working with Visa to enable pay-by-face technology in the Middle East. Under the partnership, banks can join the PopID facial recognition platform and allow customers to link their facial biometrics to their debit or credit cards. The Costa Coffee cafe chain is among the operations that plan to start using the technology. PopID has said the technology speeds throughput and increases check average while also offering a social-distancing-friendly payment option.

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