Deliverect Raises $65M to Streamline Food Ordering

The Rise of Food Delivery and the Challenges Restaurants Face

In the past year, restaurants experienced a surge in utilizing food delivery services such as Deliveroo, Uber Eats, and DoorDash. This provided new revenue streams and avenues for connecting with customers, compensating for the loss of in-person dining. However, this growth also revealed a significant challenge: managing the complexity of apps and hardware required to process orders from these various platforms proved to be a considerable burden.

Deliverect Secures $65 Million in Funding

Deliverect, a Belgium-based startup, has developed a platform designed to streamline this order management process through a unified application. Today, the company announced a substantial funding round to fuel its expansion.

Expanding Services and Integrations

The newly acquired $65 million will be allocated to broadening the scope of services and integrations offered by Deliverect. This includes compatibility with a wider array of point-of-sale (POS) terminals and third-party service providers. The company also intends to target a larger customer base, encompassing restaurants, dark kitchens, and consumer goods companies adopting direct-to-consumer strategies, across a greater number of markets.

Investment Details and Growth Metrics

The funding round was co-led by Redpoint Ventures and partners of DST Global, with participation from OMERS, Newion, Smartfin, and the founders. This brings Deliverect’s total funding to $90 million. While the specific valuation remains undisclosed, it follows a period of substantial growth. Over the last year, the platform processed $1 billion in transactions across 30 million orders, representing a nearly 750% increase in business.

A Growing Customer Base

Deliverect currently serves over 10,000 customers, including prominent chains like KFC and Pret a Manger. The company’s clientele also includes smaller restaurants such as Dishoom, a London-based Indian restaurant, the dark kitchen startup Casper, and the consumer goods conglomerate Unilever.

Comparison to Toast and Market Valuation

For context, Toast, a U.S.-based company offering similar SaaS solutions and integrated POS hardware, is reportedly preparing for an IPO with a potential valuation of $20 billion.

The Origins of Deliverect: From Family Business to Industry Solution

Zhong Xu, CEO and co-founder of Deliverect, alongside Jan Hollez (CTO), Jelte Vrijhoef (CIO), and Jerome Laredo (CRO), shared the company’s origins. The idea stemmed from his father, a Belgian-based Asian immigrant who developed a POS system for Chinese restaurants and hoped his son would continue the family business.

From POSiOS to Deliverect

Xu, however, recognized a broader market need. In 2010, he and Hollez founded POSiOS, Europe’s first iPad-based POS solution. This business was acquired by Lightspeed four years later, facilitating Lightspeed’s expansion into restaurant POS systems prior to its IPO.

Identifying the Need for a Unified Platform

Despite the success of POSiOS, Xu and Hollez observed a continuing demand from customers. “They wanted to eliminate all their tablets,” Xu explained. Restaurants and food providers faced a fragmented system, utilizing separate systems for in-house orders, phone orders, and third-party delivery platforms.

The Problem of Fragmentation

This fragmentation often necessitated multiple pieces of hardware, creating a complex and inefficient workflow. Hollez highlighted the challenges, stating, “Just try to imagine being in a restaurant: there could be people there, others calling in and between 5 and 10 tables screaming for attention. It is just not possible to manage this.”

Deliverect’s Solution: A Single SaaS Platform

Founded in 2018, Deliverect provides a single SaaS platform that consolidates all order channels into one manageable interface. The service’s pricing begins at $69 per month, scaling based on order volume.

Benefits for Food Providers

This platform enables food providers to effectively monitor stock levels, manage menu availability, track order flow, and provide accurate order updates to customers. This data is also utilized by delivery services like Deliveroo to estimate delivery times. Deliverect also offers analytics to optimize operations.

Increased Demand and Efficiency Gains

Xu noted that the demand for Deliverect’s services has increased significantly in the past year, with a 10% to 30% rise in orders originating from delivery platforms. The company claims its software improves efficiency, leading to an average 25% revenue increase and an 80% reduction in order failures caused by fragmentation.

Expanding into the FMCG Sector

Deliverect is also making inroads into the Fast-Moving Consumer Goods (FMCG) sector. Brands are seeking to establish more direct relationships with customers, particularly as the direct-to-consumer (D2C) trend gains momentum and traditional retail channels face disruptions.

Future Opportunities and Partnerships

Xu explained that brands are currently focused on marketing campaigns and physical product delivery, but the potential for Deliverect to play a larger role in the future is significant. The emergence of ultra-fast grocery delivery startups presents new customer opportunities. These platforms could leverage Deliverect to ensure a consistent supply of products from companies like Unilever.

Leveraging the D2C Trend

Indeed, FMCG companies could even utilize these platforms to become direct sellers of their products. Deliverect already partners with Glovo, a Spanish-based startup in this space.

Investor Confidence and Future Outlook

These developments underscore a promising future for Deliverect, attracting investment from prominent international investors.

Industry Perspectives

Elliot Geidt, managing director at Redpoint Ventures, stated, “The explosive rise of online food delivery is forcing restaurants to change how they operate. Zhong and the Deliverect team are building the tools and infrastructure to help restaurants thrive in a world where navigating online food delivery is a matter of success or failure. Zhong has a unique empathy for restaurant owners, an unmatched technical understanding of the food delivery tech stack, and a raw ambition and vision that leaves us very excited.”

Tom Stafford, managing partner at DST Global Partners, added, “Restaurants, consumer goods companies and other businesses increasingly want to enable on-demand ordering by their customers. But many do not have the tools or technology to efficiently work with on-demand delivery providers. Deliverect is providing key software and integrations to enable these businesses to integrate on-demand offerings seamlessly. We are excited to partner with the Deliverect team as they continue to roll out their technology globally and further develop their product offering.”