Sequoia Flips Over Kaplan’s Grilled Cheese


(Reuters) – The founder of the popular — and doomed — Flip video camera is turning to another consumer passion for his new business: food.

Jonathan Kaplan, who created the easy-to-use video-camera business that Cisco Systems bought and is shutting down, said he was launching a restaurant chain called “The Melt,” serving grilled cheese sandwiches and soup.

Heavy on technology, The Melt will encourage consumers to order sandwiches and soup using apps and to pay for them using mobile phones.

His backers include venture capital firm Sequoia Capital, known for investments in companies such as YouTube and one of the backers of Kaplan’s previous company, Pure Digital Technologies, which made the Flip.

Kaplan, speaking at the Wall Street Journal‘s D9 technology conference, said people frequently ask him why Sequoia would get involved in a restaurant business.

“Then I point them to Chipotle’s market cap,” he said. The popular burrito chain, Chipotle Mexican Grill Inc., is valued at about $9 billion.

Kaplan demoed the technology on stage and then fed grilled cheese to conference organizers Walt Mossberg and Kara Swisher. He had named sandwiches after each. The Walt is heavy on what Kaplan called “experienced” gruyere cheese.

Kaplan said he planned to open eight stores to start, at a cost of $500,000 to $1 million each, and would get help from restaurateur Michael Mina of San Francisco.

Mina will be on The Melt’s board of directors, along with Ron Johnson, head of Apple retail; Michael Moritz of Sequoia Capital; and Bruce Dunlevie of Benchmark Capital, according to a press release issued by company.

The press release did not disclose the amount of venture capital raised by The Melt. It also did not indicate if Benchmark was an investor.

It wouldn’t be surprising if Benchmark was an investor in The Melt, given the success of its investment in Kaplan’s previous effort. Benchmark and Sequoia were among 10 venture firms that invested $95.1 million in Pure Digital, which was acquired in March 2009 by Cisco for $590 million, according to Thomson Reuters (publisher of peHUB).

Networking giant Cisco closed Flip late last year, which Kaplan said disappointed him. “By the way, I think it was the right decision for Cisco,” which needed to improve overall performance, Kaplan said.

Kaplan joined Cisco along with the rest of Flip, but he chose to leave. He said he sensed Cisco might close Flip, saying that running the business “without my leadership would be challenging.”

–By Sarah McBride, Reuters

Additional reporting by Lawrence Aragon, peHUB