Lately, a huge wave of food-on-demand startups hit the market. There are those who deliver restaurant food. And there are those who deliver meal kits. Let’s not forget about those who bring groceries so you can make your food yourself. Moreover, there are those who are building machines to help you eat better at home: healthy food healthy you. And these are just a couple of variations on the theme that have come. Furthermore, a startup called MealPal has built a platform and service. It lets users “subscribe” to a list of restaurant take-out lunches and dinners. And the exciting news is that MealPal announced a healthy $20 million in funding to fuel its growth in markets it is currently active. Those counties are United Kingdom, United States, Canada, and Australia. The company is also thinking about expanding to new countries like France, etc.
And the exciting news is that MealPal announced a healthy $20 million in funding to fuel its growth in markets it is currently active. Those counties are United Kingdom, United States, Canada, and Australia. The company is also thinking about expanding to new countries like France, etc.
Menlo Ventures is leading the Series B. Moreover, the company had raised $15 million from Bessemer Venture Partners, Comcast Ventures, Haystack, and NextView.
A question that may pop into your head is what can possibly be different with this particular company? After all, there are so many restaurant food-on-demand businesses out there. And here is what separates MealPal from the rest.
“We are focused on a different audience,” Biggins told, simply identifying the office worker as MealPal’s basic unit of measurement.
The lack of delivery and the way it limits your options to just one meal from each restaurant are the two main differences. To better understand, let’s dig a little deeper.
For a fixed fee — $6.49 or $6.99 for dinner in the U.S.; $5.99 or $6.39 for lunch; £4.50 or £4.99 in the U.K. all based on the frequency of use, consumers get a selection of restaurants from which to order take-out. Moreover, each restaurant offers one dish only. Customers select what they would like to eat, and a time when they will go by to pick up your food. And there is no delivery option. When the customer shows up, the food is there, and they leave to eat it elsewhere.
Co-founder Mary Biggins says that today the company actually makes a margin on each order. And it’s using a ton of technology to help restaurants reach their holy grail. That is to help predict what people will want to eat, when they will eat it, and how much they will eat. This is all before the customers have even put in their orders.
If you think about it, the lack of delivery seems almost irreverent. And that is given that it seems you can have anything delivered today. Furthermore, many consumers seem to have come to expect that level of service in any kind of meal-on-demand model.
“The routine we’re targeting is, how you are getting your launch on a regular basis? We’ve been focused on the balance between convenient and affordable. Most can’t spend $10 to $15 per day on lunch, but something like what we have can be your go-to on a daily basis. You can access it regularly without paying too much.”
By cutting out the delivery, of course, the company has cut out a major operational pain point: logistics and a labor force to power them. These not only need to be organized but accounted for on the balance sheet.
“We are not focused on the delivery space. We are focused on making the value proposition really appealing to consumers…And we think there is a big opportunity there,” Biggins said.
And I guess there is: the company has to date delivered 3 million meals since launching 18 months ago. Of course, the company would not give away the information on fees are charged to restaurants. What we know is that MealPal pays a flat fee to restaurants for each meal that is prepared and ordered.
“We have spent a lot of time trying to understand the unit economics of our business. We have priced it competitively but also to sustain the business over the long term, and we’re not losing money on each order.”
“One of the things has been to understand how restaurants operate,” Biggins said. “The biggest expense for them is labor costs, but because they are making only one meal per day for MealPal they are able to make it much more efficient.” Unsurprisingly, it turns out that making 100 orders of the same dish is far cheaper and easier to do than 100 orders of 100 different dishes. “Essentially, we are helping them build catering orders.”
Then, to help the restaurants figure out what to make, MealPal turns to its analytics.
“We collect data from consumers to decide what they like and don’t like. We are able to tell what’s most likely to be ordered in certain markets and on certain days,” she said. They also monitor customer ratings and feedback to restaurants what they might need to change in a serving. “We use that to help restaurants figure out how to put together their meals.”
And what’s amazing is that the system appears to be growing smarter. Originally Biggins said that people had to put in orders by 9:30 in the morning, but now they can order in real-time because so much has already been pre-planned and predicted in the back end.