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Trax' shelf-monitoring system in action. Image credit: Trax

Data snapshot: The downturn is testing the value of In-Store Retail & Restaurant Tech

August 24, 2022

Data Snapshot is a regular AFN feature analyzing agrifoodtech market investment data provided by our parent company, AgFunder.

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In-Store Retail & Restaurant Tech was the fourth most-funded category of 2021, with startups bringing in $4.2 billion across 374 deals, according to AgFunder’s 2022 AgriFoodTech Investment Report. This is up from $2.4 billion in 2020.

AgFunder’s In-Store Retail & Restaurant Tech category includes technologies like shelf-stacking robots, 3D food printers, POS systems, and food waste monitoring systems. Startups in the category serve either restaurant or retail environments, and sometimes both.

Top In-Store Retail & Restaurant Tech deals in 2021

Top deals for 2021 reflect the technologies and trends that grew in the immediate aftermath of worldwide Covid-19 lockdowns in 2020: cloud-based systems to manage shipments, labor and inventories, digital tools to make restaurant ordering and payments more efficient, and some delivery infrastructure.

Retail analytics company Trax, which makes a cloud-based, computer-vision-equipped monitoring system for retail environments, raked in the category’s biggest deal with its $640 million Series E round led by SoftBank Vision Fund 2 and BlackRock

Online cannabis dispensary Dutchie took two of the top rounds in 2021: a $200 million Series C followed by a $350 million Series D.

Restaurant POS system SpotOn also landed two rounds in the top deals, with a $125 million Series D round followed by a $300 million Series F raise.

Lunchr (now Swile), Sundayapp, and Fetch Rewards offer services around corporate food ordering, restaurant QR code payments, and digital restaurant/grocery rewards, respectively.

Times have changed

Retail and restaurant management software continues to be valuable for businesses grappling with labor and supply chain issues as well as inflation’s impact on the cost of, say, basic ingredients. As the old saying goes, if you can measure it, you can manage it. Platforms like those from Trax or SpotOn can give businesses valuable insights into their operations at a granular level, which can in turn inform decisions around inventory, staff, and sourcing.

Not all companies in 2021’s top deals above are faring as well right now, however. For example, Sunday recently cut staff and exited 60% of its markets amid many other layoffs and restructures in the restaurant tech industry. Dutchie cut 8% of its 700-person staff citing “a dramatic market shift.”

That shift, of course, is the current economic downturn in which we find ourselves. VCs are being more conservative with their capital right now, and many are urging startups to make cuts in order to survive. In retail and restaurant tech, as in other sectors, that survival will depend on how much long-term value a technology can bring to its customers.

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