Tock raises $10 million from Valor Siren as it pivots to food takeout
Nick Kokonas, co-owner and co-founder of Alinea and Tock Inc., speaks at the Bloomberg Year Ahead in Luxury summit in New York, Thursday, November 29, 2018.
Mark Kauzlarich | Bloomberg via Getty Images
As co-owner of^( and CEO of an Internet start-up dedicated to restaurant reservations, Nick Kokonas is particularly exposed to the current economic crisis.
But he definitely did not succumb to it.
While the reservations giant^( staff cut and restore software provider Toast said last month it was cutting staff by 50%, Kokonas has just raised $ 10 million in funding Tock. His six-year-old Chicago-based business is helping high-end restaurants move into take-out.
Kokonas told CNBC that Tock, which has approximately 100 employees, processed $ 350 million in transactions last year by selling prepaid reservations to customers for high-end restaurants. When the coronavirus hit, Tock quickly adapted the business to focus on takeout orders. In a month or two, Kokonas predicts, the company will be able to process $ 1 billion in orders a year.
“I was not going to do anything,” said Kokonas, who simultaneously had to figure out how to keep things afloat in his restaurant. Indentation, where diners pay $ 395 for its “most intimate, immersive and cutting edge experience,” according to the website. “We adapted very quickly in both cases, and it works.”
High end microphone
Tock allows restaurants to use the same reservation system they previously had access to and charges the same 3% fee. But now, instead of asking a customer to enter a party time and size for dinner, the user chooses a time slot for pickup and indicates how many people will eat. Cars can appear every 15 minutes.
Reverence in New York charges $ 40 per person for a starter, a choice of two entrees and a dessert. Wolfgang Puck’s Spago in Los Angeles sells fried chicken on Wednesday for $ 39 per person and a barbecue on Thursday for $ 59. Kokonas said Tock receives between 150 and 200 inquiries a day from restaurants wishing to register, and the company has just added five account managers to the team.
AT Indentation, the Osso Buco and risotto that comes with antipasto and dessert costs $ 34.50 per person for pickup. Kokonas said the restaurant served more than 1,300 meals on Mother’s Day and that the increase in business in recent weeks has allowed it to re-employ 100% of its staff.
Chef Wolfgang Puck holds a Chocolate Oscar during the governor’s press preview in Hollywood.
Kevork Djansezian | Getty Images
The new investment cycle was bringing together the pre-coronavirus, said Kokonas. But when the cities started to close and the economic impact started to become clear, several venture capitalists who wanted to participate said: “We will see how long it will last and see you on the other side “, said Kokonas.
^( of Valor Equity Partners did. Valor led the pre-financing round in 2018, and Shulkin leads this round through Valor Siren Ventures, a fund that raised $ 100 million from Starbucks last year to support the next generation of food and retail products.
“Jon called and said,” Now is the time to make an investment, “said Kokonas. “We were in negotiations but we did not agree on an assessment or something like that. He said: ‘We will take the terms you proposed two weeks ago.'” Last round.
Tuesday was a busy day for the online food order market. GrubHub shares soared 29% on reports that Uber has made an offer to buy from the food delivery company. And^( the online ordering site for local pizza restaurants, announced a $ 43 million funding round, led by KKR, in an “increase in demand for pickup and delivery during the COVID-19 pandemic”.
Kokonas, a former derivatives trader, said demand for Tock’s service is picking up as restaurants accept the long-term reality of social distancing. Even as local economies begin to reopen and soften group meeting guidelines, the fear of getting sick will keep many people away from restaurants. Thus, the ability to sell take-out food in reasonable quantities will be necessary for the survival of many restaurants.
Fresh products delivered from the Chef’s Garden
In addition to restaurants, Tock now provides its technology to farms so that they can sell bags of fresh produce directly to consumers. Tock works with^( in Georgia and ^( in Ohio, and is in the process of bringing about twenty farms to its site.
Kokonas has said that Tock will have a dedicated part of its website called Tock Pastures, Produces, & Purveyors and will promote the availability of the service to its 12 million user accounts.
“These are some of the best farms and ranches in the United States, and they have primarily served the restaurant industry,” said Kokonas. “All of a sudden, they have no customers.”
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