Dining-Tech Startups Attract Steady Funding As Eateries Seek Faster, Smoother Service

The restaurant industry has become a focal point for mobile payments, what with efforts to tie payments to technology like mobile loyalty, order-ahead, and delivery apps to appeal to deal-seeking, time-starved diners. Now comes news that startups offering restaurant technology are consistently attracting financing exceeding half a billion dollars annually—a funding flow that could bode well for mobile-wallet backers looking to leverage dining apps.

Funding to restaurant-tech startups totaled $550 million last year on 111 deals, according to CBInsights, a New York City-based research firm that focuses on technology. That represented only a slight slowdown from the two previous years. In 2015, funding to the sector came to $567 million on 117 deals, while the totals in 2014 were $554 million on 108 deals.

This was a somewhat sleepy tech sector before exploding in 2014, just as mobile payments were also starting to pick up steam. In 2013, for example, restaurant-tech firms attracted just $179 million in funding on 79 deals, according to the CBInsights data.

Money is flowing to a variety of restaurant-related technologies. The three biggest bets in the fourth quarter of 2016 were Appetize, (a $20 million Series A round), Thanx ($17 million Series B), and Social Tables ($13 million Series B). Appetize specializes in integrated POS systems for food and beverage at events. Thanx offers a customer-relationship platform, and Social Tables has developed a platform for venues that need to manage dining events.

A cautionary note, however, lies in that fourth quarter, as funding took a dip to $106 million on 23 deals. The corresponding period in 2015 saw $169 million in financing on 30 deals. Whether that was a blip or a sign of slowing momentum is a matter that will play out over the year as dining establishments continue to scramble for technology that speeds up service and shoves the payments function further into the background.