Ghost kitchens are BOOOOming
Greetings, Pulse Subscribers!
This week Pulse cranks out the “big four-oh,” but we’re not feeling a day over issue 25! Thanks for joining us on this journey. But enough about us, here’s the agenda:
A culinary venture with more than a ghost of a chance?
What does e-commerce mean anymore?
Whale watching
Let’s go.
Startup Deals
Marketing Automation Platform | For retailers across the spectrum, automated customer engagement software is an essential tool. While there’s no shortage of competition in this space, Klaviyo has proven itself to be a major player. Enabling businesses to automate customer text and email communications about product recommendations, abandoned carts, price drop alerts, shipping updates, and more, Klaviyo works to make customers “feel seen and not targeted,” leveraging personalization to maximize repeat sales and order value. And it’s clearly working. Klaviyo has over 100,000 customers, including companies like Citizen and Unilever. In addition, Klaviyo recently raised $100M from Shopify and will become the “recommended email product” for Shopify Plus.
Ghost Kitchens | You’ve probably heard of ghost kitchens, but if you haven’t, they’re food preparation facilities set up for delivery or takeout meals only. Like a food court on steroids, ghost kitchens cut costs for vendors – they’re a shared space – and increase customer options. Kitchen United MIX, a leader in the ghost kitchen business, lets customers order from multiple vendors on the same ticket and delivers the goods all at once for a synchronized experience that maximizes efficiencies and costs. Seeking to expand from 15 to 500 locations over the next five years, Kitchen United MIX just closed a $100M Series C funding round with investors including Circle K, Kroger, and Restaurant Brands International. Given the strong backing from these convenience, grocery, and restaurant giants, it’s clear investors are feeling bullish on the ghost kitchen concept and Kitchen United MIX in particular.
Operating System for Groceries | Fresh food offers a unique challenge for grocers. After all, there is no clearance rack for spoiled products. First featured in Pulse #24, Afresh has been gaining momentum and rolled out its fresh food tech to thousands of stores across the US, with the goal of serving 10% of grocery stores by the end of this year. With its AI-powered Fresh Operating System, Afresh unifies previously disjointed processes, from forecasting and inventory to store operations. Using a model-based engine for perishable inventory control, Afresh optimizes operational decisions and minimizes losses. According to Afresh, stores using the system reduce food waste by 25% or more, see a 2%-4% increase in top-line revenue growth, and have a 40% or greater increase in their produce operating margin. With customers including Albertsons, Fresh Thyme Market, and WinCo Foods, Afresh recently raised $115 million in a Series B funding round led by Spark Capital.
Essential Industry Reads
In early 2020, as the pandemic had the world in lockdown, online shopping boomed, and e-commerce penetration (percentage of total sales) leaped ahead three to five years on its projected trend line in the space of a few months. With things returning to normal, Benedict Evans looks at the claims that e-commerce penetration is reverting back to its pre-Covid trend line. This insightful read plays with the data and shows that the trend line can easily be manipulated by how you define total sales, raising the great question: What do we even mean by e-commerce anymore?
In this enlightening article from The CQ, Jason Bornstein, principal at Forerunner Ventures, discusses retail “whales” (the top 20% of customers who can drive 80% of revenue) and “piranhas” (customers who create new accounts to reuse discount codes, or only buy steeply discounted items and return often). With examples of how focusing on whales can propel a business to greater success, advice on how to bring more customers into that top 20%, and suggestions for how to mitigate the damage created by piranhas, this read lays out a unique path to business growth.
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See you in two weeks!