Lunchbox Raises $20M to Empower Restaurant Ordering

The widespread shift to delivery and takeout service during the pandemic has sparked debate about the restaurant industry’s ability to thrive while facing substantial fees from delivery services such as Uber Eats and Grubhub.

Lunchbox presents an alternative, offering a platform that empowers restaurants to develop customized ordering systems directly on their own websites and applications. The company announced today that it has secured $20 million in Series A funding.

CEO Nabeel Alamgir possesses deep understanding of the restaurant landscape, having previously served as CMO for Bareburger, a role he attained after beginning his career as a busboy at the chain’s original New York City location. He explained that he doesn’t foresee restaurants completely abandoning third-party delivery platforms. However, by processing a greater volume of orders independently, restaurants can increase profitability and cultivate stronger relationships with their most valued customers, potentially through tailored offers.

“It’s crucial to avoid losing customers to these marketplaces,” Alamgir stated. “Restaurants should utilize these channels, but simultaneously encourage customers to order directly through them.”

This vision led Alamgir, alongside Andrew Boryk and Hadi Rashid, to establish Lunchbox last year. Initially, building ordering systems for early clients required over 100 days of development. While this provided a competitive advantage, the team has since streamlined the onboarding process to an average of 44 days.

Looking ahead to next year, Lunchbox intends to transition to a self-service model, extending its accessibility to smaller, independent restaurants beyond its current clientele of chains and groups like Bareburger, Clean Juice and Fuku.

The company reports that restaurants typically experience a 30% increase in sales after implementing Lunchbox. Furthermore, Lunchbox’s customer base has expanded by 925% over the past year.

Alamgir also highlighted Lunchbox’s capacity to support emerging business models, such as delivery from cloud kitchens. Notably, Lunchbox collaborates with Ordermark, which recently raised $120 million as it pivots towards a cloud kitchen approach. The company is also exploring autonomous delivery options through partnerships with Sodexo and Kiwibot, and recently teamed up with sbe to create a “virtual food hall” enabling diners to consolidate orders from multiple restaurants.

Alamgir anticipates that investors evaluating new restaurant ventures post-pandemic will prioritize questions such as, “Is it feasible to operate this business on a higher floor [with potentially lower rent]? Can this function as a delivery-only operation?” He emphasized, however, that these models are unlikely to entirely replace the traditional restaurant dining experience.

“The atmosphere and mindset associated with dining out differ significantly from eating at home while watching television,” he said. “These represent distinct dining experiences, and off-premise dining presents a substantial opportunity for innovation.”

Coatue led the funding round, with participation from 645 and Primary Ventures, along with chef Tom Colicchio, Behance founder Scott Belsky, former Venmo COO Michael Vaughan, HelloFresh founder Bryan Ciambella, Planet Hollywood founder Robert Earl and Girls Who Code founder Reshma Saujani. Rahul Kishore and Bennett Siegel from Coatue will be joining Lunchbox’s board of directors.

“Local businesses have faced significant challenges this year, but we believe Lunchbox can empower them to establish an online presence, connect with customers digitally, and rebuild stronger than before,” Kishore stated.

According to Alamgir, the new funding will facilitate the onboarding of additional restaurants, enhance the platform’s capabilities – with a key objective being point-of-sale system agnosticism next year – and support team expansion.