More than 110,000 U.S. restaurants (nearly one in six) permanently closed in 2020, according to the National Restaurant Association. Of those that survived, many were forced to rely heavily (or exclusively) on delivery and take-out orders. Unfortunately, in an industry already known for razor-thin margins, third-party platforms like GrubHub and Uber Eats can charge commissions of 15 to 30 percent per transaction on take out orders.
Lunchbox and their industry insider CEO Nabeel Alamgir are out to return the power to where it belongs, in the hands of the restaurant owners. Instead of charging a per-order commission, Lunchbox operates on a SaaS model, charging restaurants a flat fee of per month per location. "We want to be an afterthought," says Alamgir. "The better you do, the more we don't matter."
Although the online restaurant marketplace and delivery category appeared crowded, if you asked restaurants whether or not they were happy with the status quo they’d say no. Their margins were being squeezed by delivery companies that take large percentages of the transaction value (30%+), and they didn’t have a chance to provide loyalty to their customers. This was especially true for restaurant chains, like Bareburger in New York, who had a strong brand following already.
Everyone on the Lunchbox founding team had spent time working in a restaurant at some point; it became clear to us that a full-suite product like this could save restaurants a lot of money and help them run more profitable businesses. Our early customer references just reinforced this belief, which convinced us to lead Lunchbox’s Seed round.