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While food delivery apps have provided restaurants with a lifeline during the pandemic and lockdowns by creating new demand and exposure, the benefits come not without a cost. Fees charged by these platforms can reach 30%, reducing the already noticeably low margins for most food establishments. Sesame is looking to change that with its food delivery marketplace that offers a flat fee of $ 125 per month to restaurants rather than a commission per order and the customer is billed a flat service fee of $ 3 as well as 2.99. $ for delivery. Most of these traditional applications do not provide restaurants with any customer data, which prevents restaurants from forming meaningful relationships with customers; Sesame works with an open customer data model and allows restaurants to create rewards programs tailored to their customers as well. The platform is currently in a beta launch phase, serving a delivery area between 34e and Houston, with an ever-growing waiting list of New York establishments looking to join.

AisleWatch met the CEO and founder of Sesame Josh morgan to learn more about how his experience at Hillstone Restaurant Group and Nomad laid the foundation for the thinking behind the business, the company’s strategic plans in New York City and beyond, the pre-funding cycle – priming and much more …

Who were your investors and how much did you raise?

Sesame raised $ 3.4 million in this preselection round co-led by Eldridge Industries, Tuesday Capital, and Relish works – a venture capital arm of Gordon Food Service, the largest private food distributor in North America.

Tell us about the product or service offered by Sesame.

Sesame is a food delivery marketplace that allows independent restaurants to regain control of their off-site operations, tackling the unfair practices of platforms such as Grubhub, DoorDash, and Uber Eats. With zero commission and an open customer data model, Sesame enables restaurants to turn a profit while providing a more affordable and consumer-friendly experience.

What inspired the start of Sesame?

When Covid hit, I began to obsess over the issues that exist in the restaurant industry. The one that stood out to me the most was the flawed delivery system, in which a few large third-party apps have a monopoly on the market, prioritizing convenience over workers’ well-being and charging restaurants sky-high commissions. I am committed to finding a solution that would help restaurants stay in business while providing consumers with the convenience they now rely on.

How is Sesame different?

If a restaurant makes $ 100,000 per month in off-premises sales, mostly fueled by major third-party delivery platforms, that restaurant could pay up to $ 30,000 in commission fees. With Sesame, this restaurant pays a flat fee of $ 125 per month. The commission-free model prevents restaurants from losing profits in order to offer delivery.

For the consumer, Sesame charges a flat fee of $ 3 per order, which means the more they spend, the more they save (most delivery apps charge a percentage fee). Sesame also makes customers feel good about their food delivery choices: they strengthen their communities by helping to keep their local restaurants in business. Additionally, the Impact Points program rewards clients with points to donate to their favorite charities, including City Harvest, with whom Sesame has continued return.

Which Sesame target market and how big is it?

The convenience economy has taken the food and beverage industry by storm, and off-premises sales have been on the rise for many years. Due to Covid, this trend accelerated by several years, unfortunately, dominated by players like DoorDash, making it more difficult for restaurants to build sustainable businesses off-site. We believe that the growth of offsite activities will continue to accelerate in the years to come.

What is your business model?

Our business model is built on a restaurant-centric philosophy, which means creating sustainability for restaurants to operate offsite while maximizing profit is at the heart of our model. We do this by throwing out the commission-based monetization playbook and replacing it with a fixed, nominal SaaS fee. We also charge a flat consumer service fee ($ 3) which means the more you spend, the more you save compared to other delivery apps.

What are your post-COVID office plans?

We strongly believe in the importance of developing the culture and building a cohesive team, and as a startup it is extremely important to spend as much time as possible in person. Most of our team have been in the office for a few months, but we offer tremendous flexibility between the office and the WFH.

How did the funding process go?

The fundraising process was exciting, scary and intimidating all at the same time. We set ourselves the bold goal of disrupting a very large industry dominated by some of the biggest tech companies in the world, so it was no small feat. But we met amazing people, listened, absorbed, rehearsed and ended up learning so much from the process that it was invaluable to the Sesame model. Ultimately, we’ve partnered with some of the smartest, most sophisticated and mission-driven investors, and we feel very honored to have the support of our investors.

The fundraising process was exciting, scary and intimidating all at the same time. We set ourselves the bold goal of disrupting a very large industry dominated by some of the biggest tech companies in the world, so it was no small feat. But we met amazing people, listened, absorbed, rehearsed and ended up learning so much from the process that it was invaluable to the Sesame model. Ultimately, we’ve partnered with some of the smartest, most sophisticated and mission-driven investors, and we feel very honored to have the support of our investors.

What are the biggest challenges you have encountered when raising capital?

Being a pre-product and pre-income business is a challenge, and due to the amount of capital we were looking to raise in a pre-seed cycle, it wasn’t for everyone. It was therefore difficult to find the right solution with a start-up investor. But the good news is that we have built incredible relationships with many awesome growth stage investors who we look forward to staying in touch with.

What factors related to your business led your investors to write the check?

I think most investors are looking for passion, a drive to create monumental change and impact in the company, and a team of leaders they trust. This is what, in my opinion, prompted investors to engage.

What are the milestones you plan to achieve over the next six months?

We have established milestones with the restaurant offering on our platform as our beta rolls out and we are looking to expand throughout the New York metro area. We have milestones attributed to the economic impact of our platform on our partner restaurants. And we have milestones relating to the societal impact we can have on our communities by helping feed hungry New Yorkers through our partnership with City Harvest or our Impact Points program, which allows consumers to donate to thousands. charities in their communities.

What advice can you give to companies in New York that don’t have a new injection of capital in the bank?

Expect a rainy day and never stop elevating!

What’s your favorite outdoor restaurant in New York City?

Refreshment area.


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