Acelerate Raises $14.44M Series A for Cloud Kitchen Expansion

Acelerate Secures $14.44 Million in Series A Funding

Acelerate, a company dedicated to optimizing restaurant operations through innovative software solutions, has announced the completion of a $14.44 million Series A financing round. The investment was spearheaded by Sequoia Capital.

Origins and Founding Vision

The company was established by George Jacobs, whose formative experiences included working within his family’s pizzeria. Initially pursuing a business degree at USC with the intention of expanding Georgee’s Pizza, Jacobs identified a broader market opportunity following the rapid advancements in technology.

Following a period with Doordash, Jacobs conceived the idea for Acelerate, a venture focused on empowering restaurants to fully leverage their existing infrastructure.

Core Software Functionality

Acelerate’s initial offering is a streamlined software platform designed to centralize a restaurant’s digital presence. This includes comprehensive management of order processing, pricing strategies, menu modifications, and both sales and marketing initiatives.

Restaurants commonly operate through direct, in-house channels, alongside numerous third-party platforms such as Doordash, Uber Eats, and Seamless. Furthermore, they maintain listings on directories like OpenTable and Yelp.

Managing this multifaceted digital landscape can present significant challenges.

Acelerate’s Software-as-a-Service (SaaS) product provides a unified interface for controlling all these platforms.

Differentiated Licensing Business Model

Acelerate distinguishes itself through a unique licensing component. The company has developed seven exclusive restaurant brands, each featuring distinct menus.

These brands, complete with recipes, preparation instructions, and staff training materials, are licensed to restaurants seeking to diversify their offerings through online sales channels.

Expanding Revenue Streams for Restaurants

Consider, for instance, an ice cream parlor that experiences seasonal fluctuations in demand. While thriving during warmer months, it may face reduced activity in the winter. This establishment likely possesses a fully equipped kitchen that remains underutilized outside of ice cream production.

Acelerate enables this parlor to license the rights to operate a burger restaurant or a barbecue establishment within the same space. Employees are trained to prepare new menu items, such as bacon cheeseburgers or racks of ribs, thereby generating additional revenue during slower periods.

Moreover, Acelerate facilitates the licensing of menus from established restaurant brands to partner restaurants.

Currently, Acelerate has secured licensing agreements with three existing restaurant chains.

Software and Licensing Adoption

Larger chains, such as Applebees, primarily utilize Acelerate’s software capabilities. However, smaller restaurants are more inclined towards the licensing product as a means of business expansion. The startup is also capitalizing on the growing trend of cloud kitchens.

Revenue Model and Fees

The software component operates on a standard monthly subscription basis. For licensing, restaurants can choose from Acelerate’s proprietary brands or those offered by third parties.

Acelerate retains a 40% fee from restaurant partners, encompassing all third-party marketplace costs, order processing expenses, delivery charges, and promotional spending. The company also negotiates favorable national food distribution agreements to assist restaurants in sourcing new ingredients.

Current Operations and Future Plans

Jacobs revealed to TechCrunch that Acelerate currently serves thousands of restaurants with its software and that hundreds of locations are actively licensing Acelerate brands.

The newly acquired capital will be allocated to team expansion and continued product development. Acelerate currently employs 11 individuals, with approximately half representing women or underrepresented minority groups, according to Jacobs.

A Holistic Approach to Restaurant Operations

Jacobs emphasized that Acelerate’s strength lies in its integrated approach, moving beyond a purely software-based solution.

“The significant opportunity resides in combining essential aspects of restaurant management – technology and operations,” Jacobs stated. “We believe that close proximity to our customers is crucial, and we are committed to building local teams and providing hands-on support to our operators and restaurant partners.”