ChowNow Pulls In $20 Million In Series B Round

ChowNow earned $20 million in venture funding during a series B round, TechCrunch reported. Total funding for the online food delivery service now stands at about $40 million.

The round was reportedly led by growth equity firm Catalyst Investors.

“We were excited for [Catalyst] to get involved because they were behind MINDBODY,” ChowNow CEO Chris Webb said to TechCrunch, referring to MINDBODY, a health and wellness software provider also funded by Catalyst. “It’s a different vertical, but the commonality is that we’re building software for small businesses. It seemed like a natural fit.”

Recently, ChowNow also unveiled a branded mobile app to help its customers discover restaurants, TechCrunch reported. Webb described the app as a “matchmaking service’ – restaurants want additional customers, and customers who place orders using ChowNow want to find other available restaurants.

“The value we are creating is delivering customers to them for the first time,” Webb told TechCrunch. “We will take a finder’s fee, but from there on, the restaurant will own that customer.”

After the first order is placed through the ChowNow app, ChowNow will not monetize single orders, according to the report. Unlike most other online delivery services, the company does not charge a per-order commission. Instead, ChowNow charges participating restaurants a $150 monthly fee.

Since its 2011 launch, ChowNow has acquired 8,000 restaurant customers throughout the U.S. and Canada, reported TechCrunch. The company expects to process $300 million in orders this year. About half of the orders processed are for delivery, which is a process that ChowNow doesn’t participate in directly.

“We do not have our own [delivery] fleet,” Webb said to TechCrunch. “We’re just a software company at the end of the day. We have no ambitions to have a delivery fleet at all.”

GrubHub, a competing food delivery service, is facing a lawsuit over its practice of treating delivery workers as contractors rather than employees.