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Image credit: Zume

Robot-enabled pizza startup raises $48m Series B, bucking decline in restaurant tech

October 11, 2017

Zume Pizza, a pizza delivery company with a robot for a chef, has raised a $48 million Series B round according to a SEC filing. The Mountain View, California company has not released its cast of investors in this round, but previous investors include Signal Fire, Kortschack Investments, and New York-based FJ Labs.

Zume is one of just a few startups creating solutions for restaurants and retailers to use in-house compared with the rest of the agrifood tech sector; In-store Retail & Restaurant Tech represented under 4% of the total raised by agrifood tech startups in the first half of this year. Technologies ranging from automated shelf-stacking robots and 3D food printers to point-of-sale (POS) systems, automated kiosks, and food waste monitoring IoT systems raised $161 million collectively out of the $4.4 billion raised by the sector at large, a 72% year-over-year drop.

Further, only a fraction of this modest sum went to restaurant equipment tech, with much more funding directed toward more traditional VC investments like POS and customer relationship management software.

But could this deal for Zume mark a change of course for the slow-burning restaurant tech category?

According to CB Insights, 10 million jobs are at risk of being lost to automation in the next five years, and 4.6 million of these are cooks and servers. CB Insights says that the fast foods sector is likely to be hit the hardest and though Zume calls its pizza “a seamless blend of art and science” it would likely fit into this category from an operational perspective.

Recent activity involving some heavyweight venture capital names could spell good news for the category.

Momentum Machines, San Francisco’s burger-making robot company, raised $18.4 million in June from Silicon Valley tech investors GV (Google Ventures), Lemnos Labs, and Khosla Ventures, and New York-based Great Oaks Venture Capital. The company is valued at $94 million.

Cafe X Technologies is a robotic cafe startup taking orders, payments, and making coffee without human labor. The company raised a $5 million seed round from billionaire Peter Thiel’s The Thiel Foundation and Khosla Ventures among others.

Chowbotics, a restaurant robotics company whose first product is a salad-making robot vending machine, raised a $5 million Series A round from four Southwest venture funds including Galvanize Ventures and Techstars, bring its fundraising total to $6.3 million.

Also in the food service robot space is Soma Bar, an automated bartender aimed at hotels and restaurants, teaBOT a robotically-run tea kiosk, Eatsa, an automated order-taking system, and automated smoothie store UgoSmoothies.

Beehex, a 3D food printer and decorator, raised a $1 million seed round from the co-located Ohio-based food manufacturer Grote Company in March. And in July, Miso Robotics, which is developing a robotic kitchen assistant for restaurants, raised a $3.1 million seed round led by patent services firm Acacia Research.

Zume’s business model of selling pizza and not robots may be an early sign of a new way robotics will change the food service labor market, since it doesn’t rely on entrenched quick-serve players to integrate the technology into existing operations to be successful. Major players in the quick serve and fast casual spaces have reacted to the introduction of automation in vastly different ways.

Missouri-headquartered US fast causal chain Panera has said that automating its ordering system has allowed the company to take more orders, leading it to hire more cafe and delivery staff.

US quick-serve restaurant Carl’s Jr. CEO Andy Puzder conversely has said that an increase in the minimum wage would lead the company to automate workers out of jobs.

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