This Chicago startup wants to make on-demand food delivery even faster

by Andreas Rekdal
December 20, 2016

The advent of on-demand food apps has revolutionized the lazy night in. With a simple tap on your smartphone, you can discover new restaurants you wouldn’t have known about otherwise, order dishes with names you can’t pronounce with impunity, and not have to speak to a soul until your order shows up at the door an hour later.

Although the consumer experience feels fully automated, it’s actually powered by a lot of elbow grease on the restaurant side.

“When you use Grubhub, Uber Eats or anything like that, when you place an order, they send a fax or have a tablet in the restaurant that shows them new orders,” said Chowly co-founder and Partner Brian Duncan. “They then have to take every single order and type it manually into their point-of-sale system.”

Chowly streamlines the online ordering process for restaurants. Its software integrates with 170 different online ordering platforms — including Grubhub, Eat24 and Uber Eats — and plots orders directly into the restaurant’s internal ordering system.

Duncan said he became aware of the market opportunity a year and a half ago while working as a consultant in the food and beverage industry. While visiting a high-volume takeout restaurant, he noticed that it had three employees whose sole jobs were to plot online orders into the restaurant’s system.

“I was under the impression that they were all integrated,” said Duncan, who was himself an avid Grubhub customer. “I just couldn’t believe it. You’re telling me that out of the 350,000 Grubhub orders that happen in a single day, not to mention the additional competitors, somebody is typing all of these things in?”

After taking a step back, Duncan said the whole thing started making more sense. The market for point-of-sale systems is extremely fragmented; most solutions have less than 1 percent market share. Supporting every restaurant’s internal ordering system, therefore, would be prohibitively expensive for any individual ordering platform.

Although individual restaurants could not afford to build their own integrations, Duncan theorized that they’d be willing to pay for software that allowed them to save on back-of-house overhead — and thus Chowly was born.

In the year and a half since its founding, Chowly has gained some serious traction. At this point, the company is processing about 10,000 orders and onboarding between 50 and 75 new clients every day. The team is also planning an expansion to Canada, Europe and the Asia-Pacific region.

Chowly recently landed a seed round led by MATH Venture Partners, who was joined by Chicago Ventures and M25 Group, for an undisclosed amount to further fuel its growth.

With a current dozen-employee headcount, Duncan expects to hire between five and seven more in January.

Image via Chowly.

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