Ghost kitchens have their own fintech start-up

Photo illustration by Nico Heins

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A sure sign of the establishment of ghost kitchens as a separate restaurant industry, a startup has sprung up to offer operators financial products such as loans and credit cards.

Ghost Financial “emerged from stealth” (i.e. came to public prominence) 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 by some metrics are set to be a $1 trillion business dollars by 2030.

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

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

Well, Meyer has 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 he was successful, he learned that margins are just as thin as restaurants (about 5%) and operators tend to pay a lot of big cash expenses. Meanwhile, they are losing 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 lead with empathy — not our pockets — to create a truly independent financial and banking backbone for the fast-growing restaurant and ghost kitchen industry,” Meyer said in a statement. “That means: creating a friendly financial partner who is neither the owner nor the delivery app.”

For what it’s worth, independent restaurants have long faced similar issues obtaining financing from traditional sources. (Their difficulties navigating the Paycheck Protection Program is just one example.) In response, technology providers like DoorDash and Toast have begun expanding their offerings to include financial products like cash advances. and loans.

Ghost Financial is the latest to join this pool, with a particular focus on ghost kitchens, although it said it would also work with restaurants. And while that might be a tempting lifeline for start-up restaurants, it makes me a little nervous. Ghost kitchens are meant to complement 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 has raised $7 million for its hiring technology. Landed’s app automates the process of recruiting restaurants and workers. It has grown rapidly over the past year, he said, increasing its revenue more than 20 times since the start of 2021. More than 150,000 workers and hundreds of restaurants use its app, according to the ‘business. He plans to use the new capital to add more users and develop new products. The seed funding was led by Javelin Venture Partners and Blockchain Capital.

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

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

Nextbite has hired a concept director. Lara Hoyem spent nearly 15 years at Shutterfly, where she most recently managed the company’s photo book line. She will bring this digital commerce experience to the virtual brand provider, leading the development of new brands, consumer marketing and other strategies. She is the latest addition to Nextbite’s growing leadership team.

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

PopID is working with Visa to enable pay-per-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. Cafe chain Costa Coffee is among the operations considering starting to use the technology. PopID said the technology speeds throughput and increases check average while providing a social distancing friendly payment option.

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