Luxor Capital Group led a Series A funding round in Smunch, which provides online ordering for delivery of restaurant meals to offices. The funding round brings Smunch’s total capital raised to 18 million euros. Other investors in the funding round included Nosara Capital, Colle Capital and existing angel investors including Emmanuel Thomassin, CEO of Delivery Hero.
Smunch, the Online Canteen that delivers restaurant meals to offices to enable employee teams to eat together, today announced that it has closed a Series A financing round, bringing to EUR 18 million the total capital the company has raised since it was founded in 2016. The financing round was led by U.S. investor Luxor Capital Group with participation by Nosara Capital, Colle Capital, and existing angel investors including Emmanuel Thomassin, chief financial officer of Delivery Hero.
Since it was founded in 2016, Smunch has made it easier for companies like Mercedes-Benz, Nike, Wayfair and others to provide healthy, mindful food to their employees on a daily basis. The company today operates in three major German cities, including Berlin, partnering with dozens of restaurants.
Smunch enhances employee catering in the company
Smunch has reimagined employee dining by allowing for social, unplanned interactions among employees and making breaks more efficient. Rather than spending time in elevators, searching for restaurants, and waiting in queues, employees are able to take more enjoyable, less demanding lunches with their colleagues, while eating delicious and wholesome food.
To complement its daily delivery service, Smunch is now offering its corporate clients “smart fridges” stocked with fresh food, refilled daily, as well as snack boxes and fruit baskets. The company is launching additional product lines to meet the needs of employees’ work lives, focused on breakfast, lunch, breaks and team care packages, and other social rituals.
Employers save taxes and reduce fixed costs
For employers, the Smunch model also offers significant value. Traditional canteens, or company restaurants, typically are characterized by high fixed costs and significant contractual requirements with corporate catering firms. Moreover, such corporate canteens serve only about 20% of the workforce in Germany today, as these are largely in offices with 1,000 or more employees. In contrast, a Smunch partnership presents the opportunity to avoid or eliminate the costs associated with operating a corporate canteen or catering function. Smunch’s delivered food can be subsidized through meal allowances, and also save the employer taxes and social security payments. The Smunch model can work as well for the 50-person office as for a 3,000-person company.
Covid-19 accelerates the trend shifting gradually away from the traditional canteen
More than 100 corporate clients are today served by Smunch for their everyday lunch programs, and the company is seeing increased demand as businesses seek to reestablish a rhythm to workforce engagement following the peak of the Covid-19 pandemic, as well as reduce the fixed costs associated with a corporate canteen or catering function.
Shivram Ayyagari, Smunch’s Chief Executive Officer and Co-Founder, said:
“Consumer behavior has changed dramatically over the past decade with the rise of online food ordering and increased expectations by consumers for good quality food and service. Smunch’s model addresses both these expectations and emerging ways of working, whether remote or on-site, and that’s particularly relevant in the current environment. By removing the need for infrastructure within an office or facility, a company can be highly flexible, providing great food at 10% of the cost of a canteen and the ability to scale with the organization’s needs dynamically.
“The pandemic has demonstrated that the future of work will be different, with fewer people in offices, but creating a need to address this audience with flexible solutions, including food options they can take home with them. This phenomenon will make existing corporate canteens less viable, as there is a smaller addressable audience, yet with the same fixed costs.”
“As such, it is not surprising that we are seeing an increase in requests from companies which have had a canteen, but are now looking for alternate, sustainable solutions, and to meet safety requirements that have made shared serving dishes an issue. While the market has been shifting gradually away from the traditional canteen for some time, the trend is now accelerating due to the pandemic.”
Our mission is to make it easy for companies to offer wholesome dining and social experiences. That’s why we hand-pick our restaurants and food partners to offer a wide selection with a stellar experience. We bring it directly to you so that your teams can enjoy the break together. At Smunch we take great pride in our attention to detail – from designing a balanced menu and carefully selecting our food partners, to delivering lunches in environmentally friendly packaging. All of this so your hardworking teams can have a smart lunch at work! Additional information is available at www.smunch.com.