MarginEdge, a restaurant management software company, raises $18M

MarginEdge announced Monday that it has raised $ 18 million in Series B funding to give restaurant owners a real-time view of their costs.

Co-founder and CEO Bo Davis founded the company in 2015 with Roy Phillips and Brian Mills. Both Davis and Phillips are veterans of the restaurant industry: Davis previously founded the Wasabi conveyor belt sushi restaurant chain, while Phillips is an executive at Bloomin. was brands.

What they realized with independent restaurants was that they were struggling with workflows like invoices and tracking grocery costs, and either developing in-house tools to keep track of things or still using pen and paper or spreadsheets.

“We were focused on building something that our friends would like to have,” Davis told ProWellTech. “We worked on the product for three years and worked with 20 restaurants to use the software and focus on getting it right rather than rushing to the market.”

MarginEdge’s tool is a restaurant management app that works with a company’s point of sale to streamline inventory, track costs, order and recipes, and eliminate paperwork. It also captures any invoices, receipts or invoices and converts them into line item details within 24 hours. It’s designed for independent restaurant owners with fewer than 50 units, Davis said.

Since launching its app in 2018, the Virginia-based company’s platform has been used in over 2,500 restaurants. It did a Serie A in 2019, then an A2 in 2020, and with the final round led by IGC Hospitality, it raised a total of $ 25 million.

IGC Hospitality, which operates restaurant real estate, is not only an investor but also a customer, said Jeffrey Brosi, founder and managing partner. The company used various technology platforms to manage inventory and sales but was looking for something to manage their entire inventory process.

“Bo came in and gave a presentation and it was amazing,” added Brosi. “The greatest thing for us is [being] user friendly. MarginEdge also has great customer service. We have invested in a few companies in the hospitality industry and we understand the flaws and what we want to fix. If it makes financial sense, we invest. That was a pain point we didn’t have, and Bo filled that void. “

Like all restaurants for the past 18 months, Davis said the global pandemic caused MarginEdge to step back and evaluate. Although many restaurants are going out of business, he credits his business with the resurgence of restaurants rethinking their processes.

“We were fortunate enough to have capital to hold our team,” he added. “Sales fell for the first time, but we grew 45% despite COVID and posted annual growth of 200% in the first quarter.”

MarginEdge has over 400 employees and its platform processes 45,000 invoices per week. Davis intends to invest the new funds in building the executive team, product development, building new back office functions, and data science, an area he has just graduated from, he said.

Using benchmark data on sales, food costs and labor costs, the company aims to provide its customers with more insight into how inflation is affecting all of these, and therefore menu prices.

“Much uses data to understand menu prices and what other people are doing so you don’t get out of the market or work with margins where you can’t survive,” added Davis. “It will be more about forecasting than reporting. The two toughest things in the kitchen are the prep list and late night inventory, and we’re making both of these easier. “

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