MarginEdge announced Monday it has raised $ 18 million in Series B funding to give restaurateurs a real-time view of their costs.
Co-founder and CEO Bo Davis founded the company with Roy Phillips and Brian Mills in 2015. Davis and Phillips are both restaurant industry veterans: Davis was previously the founder of the sushi restaurant chain in Wasabi conveyor belt, while Phillips was an executive at Bloomin. Brands.
What they recognized with independent restaurants was that they were struggling with workflow like invoicing and tracking food costs and were building internal tools to help them stay on top of things. or that they always worked with pen and paper or spreadsheets.
“We focused on building something our friends would love,” Davis told TechCrunch. “We spent three years on the product and worked with 20 restaurants to use the software and focus on making it work instead of rushing to market. “
MarginEdge’s tool is a restaurant management application that works with a business’s point of sale to streamline inventory, cost tracking, orders, and revenue to eliminate paperwork. It also captures all invoices, receipts or invoices and converts them to line details within 24 hours. It’s designed for independent restaurateurs who have fewer than 50 units, Davis said.
Since launching its app in 2018, the Virginia-based company has seen its platform used in more than 2,500 restaurants. He raised a Series A in 2019, then an A2 in 2020 and with the final round, led by IGC Hospitality, raised a total of $ 25 million.
IGC Hospitality, which operates catering establishments, is not only an investor but also a customer, said Jeffrey Brosi, Founder and Managing Partner. The company was using different technology platforms to manage inventory and sales, but was looking for something to manage their entire inventory process.
“Bo came over and gave a presentation, and it was amazing,” Brosi added. “The most important thing for us is [being] user-friendly. MarginEdge also has great customer service. We have invested in a few companies in the hospitality industry and know the weak spots and what we want to fix. If it makes financial sense, we will invest. It was a pain point we didn’t have, and Bo filled that void.
Like all restaurants over the past 18 months, Davis said the global pandemic caused MarginEdge to step back and assess. Despite the closure of many restaurants, he attributes the restart of his activity to restaurants that have redesigned their processes.
“We have been fortunate to be in a good position with capital to keep our team,” he added. “Revenue fell for the first time, but we grew 45% even with COVID, and in the first quarter we had 200% annual growth.”
MarginEdge has more than 400 employees and its platform processes 45,000 invoices per week. Davis intends to invest the new funding in building the leadership team, developing products, creating new features for the back office and data science, an area in which he has just received. a graduate degree, he said.
The company uses benchmark data on sales, food costs and labor costs and wants to provide more information to its customers regarding inflation, which affects all of these aspects and therefore , menu prices.
“A lot of this uses data to understand menu prices and what others are doing so that you don’t leave yourself out of the market or operate on margins where you can’t survive,” Davis added. “It will be about predicting rather than reporting. The two most difficult things in the kitchen are the start-up prep list and the late night inventory, and we make both easier.