SEO Werkt!

Today, thanks to the maturation of the web, digital tech, and smartphones now in seemingly every pocket, startups are finding it easier than ever before to build scalable solutions to finally address the many inefficiencies in our food manufacturing, production and distribution systems.

As interest in food tech balloons, one area in particular appears to already be at the tipping point: Online and mobile food delivery. Over the last few days, we’ve hearing about a merger between two of the largest companies in the space. Rumor has it that “arch rivals” GrubHub and Seamless are in talks which could see them join forces as part of a merger. While our sources tell us that the talks are serious, the terms of the merger are not yet clear and, of course, any potential deal could fall through.

Furthermore, it’s not yet clear what kind of synergies would take place, how management of the new entity would be structured or even what the new business will be called. The two companies would not confirm on the record on any of the above. But as far as the name goes, we’re hoping for Grubless. Or Hubless GrubSeam. But they have a nice ring to them, don’t they?

If these rumors are true, the merger comes at a good time for the arch rivals, who have been seeing mounting competition of late from a laundry list of new startups entering the space, including increasingly popular alternatives like Delivery.com, ChowNow, Munchery (meals from local chefs), Campus Special, eat24 or the bigs of Europe, like Food Hero and Just-Eat. 

If the online food-ordering and delivery market is roughly where daily deals were three-plus years ago, then the deal essentially creates the Groupon of food delivery. Like the daily deals market, food ordering has traditionally had a fairly low barrier to entry, which helps explain why we seem to see a new startup pop up every week.

Plus, the business model isn’t particularly complicated, making it replicable. That being said, innovation and tech adoption have been slow to come to the food industry, and, at scale, this model (taking a slice of transactions) has the potential to be able to generate a lot of cash.

This is just one part of why the “food tech” business has been so hot lately. Just ask venture capitalists who collectively poured $350 million into food startups over the last year. (Compare that to 2008, when it was less than $50 million.) Plus, when you get right down to it: People need to eat. And, as it turns out, people are pretty busy. Uh, and lazy.

Of course, for those who remember the spectacular failure of online food companies like Webvan, Kozmo and HomeRuns, this whole “tech in your kitchen” and online ordering jibber-jabber probably sounds familiar — and not in a good way. But this time it’s different. Research from Cornell University recently found, for example, that over 40 percent of adults in the U.S. have ordered food online, and 10 percent of restaurant orders now originate online — and these numbers continue to head north. GrubHub and Seamless have built successful businesses on this very idea.

Both GrubHub and Seamless have been around for some time: The New York City-based Seamless was founded in 1999, while the Chicago-based GrubHub got its start in 2004. And for the most part, the two companies have catered to two different markets geographically. While both now have fairly expansive coverage, GrubHub has naturally developed a firm foothold in the Midwest, while Seamless focused its early attention on NYC, before moving into cities like Los Angeles and San Francisco. From that perspective, a merger would make sense, allowing the new, consolidated entity to gain penetration into markets where they lacked a major presence.

Writ large, the companies, while having some fundamental differences, do seem to have a lot of synergies on paper — at least “nominally,” depending on who you ask — likely why they’ve increasingly become rivals over the years. Bboth are of fairly comparable size, as GrubHub has more than 18,000 restaurant partners across more than 500 cities, while Seamless has over 12,000 restaurants and serves nearly 5,000 businesses and more than 2 million users. As of February, Reuters reported that Seamless was on track to generate more than $100 million in revenue this year as it expands into new cities and focuses more aggressively on mobile.

The company reportedly generated $85 million in revenue last year, growing its consumer business by 60 percent year-over-year and “will soon be processing $1 billion worth of food orders a year,” Seamless CEO Jonathan Zabusky told Reuters at the time. For the majority of its history, the company focused primarily on New York, but launched a major expansion effort last year, bringing its service to 10 new cities. According to the report, Seamless saw its transaction volume quadruple in Los Angeles during 2012, with transactions tripling in San Francisco.

Another interesting point to note: GrubHub was reported to be considering an IPO last fall. The company denied the rumors at the time, and if this merger is true, then they’ve been given the proper perspective. Certainly, it would seem that this wouldn’t take a potential IPO off the table, instead, likely making an opening price that much higher.

The IPO rumors for GrubHub came at a time when the company was reportedly doing about $60 million in revenue (this was in 2012) — a little less than half that of Seamless. Furthermore, Crain’s reported in December that GrubHub’s revenue has been doubling every year and, as the company reported $30 million in revenue in 2011, that revenue estimate would make sense and put the company on the path to crossing $100 million well before the end of this year.

That is all to say that, although the terms of the potential deal are unclear, these are two sizable businesses that are growing relatively fast, so any potential valuation has got to be fairly high. After all: The two companies were fairly comparably capitalized and staffed, with GrubHub growing to over 250 employees and Seamless over 300, while GrubHub raised about $84 million from a mix of venture and growth equity firms (including Benchmark) and Seamless raised $51 million, $50 million of which came from private equity firm Spectrum Equity.

While both companies have made a couple of acquisitions, this would be the second big M&A deal for Seamless, as the company was acquired by food services giant, ARAMARK, in 2006. Five years later, Spectrum bought a minority stake in Seamless from ARAMARK, and about a year later, the food services company spun-off its remaining interest in Seamless to its shareholders. Free from its corporate ownership, Seamless proceeded to go out and buy MenuPages for $15 million, showing up GrubHub, which MenuPages had initially targeted as its acquirer. When GrubHub and MenuPages couldn’t agree to a deal, and it seems that GrubHub was instead in the process of buying Dotmenu/Allmenus, Seamless swooped in — according to BetaBeat.

So, as you can see, the companies have a long history of jostling. While GrubHub had been out acquiring restaurant partners fast and furiously, Seamless stagnated a bit under ARAMARK, but since becoming an independent company (again) and with a new board/investors, the company seems to have been compounding its growth. Together, that growth could be exponentially higher.

Finally, if this deal is in fact a go, it’s worth looking at this quote from GrubHub co-founder and CEO Matt Maloney from back in 2011. In it, he shares his opinion on GrubHub’s top competitor, a little company called Seamless. He told BetaBeat:

I typically don’t talk this much about Seamless because we don’t view them as incredibly strong competition for what we’re doing … Seamless fundamentally is a corporate catering business. They were founded years and years and years ago to do just that. And they’re still best in the business for corporate. They recently got into the consumer and residential pick-up and delivery. And they do it well in New York, but they really have zero business anywhere else. We don’t even consider them competition anywhere other than Manhattan specifically.

So, there you go. A match potentially made in heaven, and one that’s sure to shake up online and mobile food ordering if it happens.

Find Seamless at home here and GrubHub here.

Dish.fm, the recently relaunched restaurant recommendation app which focuses on the best menu items, as opposed to overall venue reviews, is today rolling out an update which expands the service into more of a dish search engine than local utility. The company had previously allowed you to see the best dishes nearby and compare dishes inside a restaurant, but now the app also helps you find the best dish (e.g., steak, tiramisu, pizza, etc.) anywhere – whether that’s 10 minutes away, in your city, or even elsewhere in the world.

When the startup had originally launched, it had gone the “Foodspotting” route, which had it relying on crowdsourced photos and reviews. Following the app’s overhaul, which debuted this past December, the new focus has been on building on top of established content from sources like Yelp, Foursquare and Instagram. In order to determine the best dishes around, Dish.fm analyzes public reviews and tips found across the web, extracts those, and counts each positive review as a “like” within its application.

With today’s update, that functionality has been expanded, now allowing users to search for favorite foods, drinks or desserts anywhere they want, using a slider at the bottom of the app’s homescreen which can be set to anything from 0.1 miles to 15 miles to search closer to home. Or, if you’re planning a trip, for instance, a new search interface lets you search for both dishes or restaurants by name in another city, and display these on map or within Dish.fm’s now cleaner, visual interface featuring photos of the items in question.

The app has also added key details like the restaurant’s hours, directions and phone number, and has updated user profiles to rank dishes by the date reviewed, so it can serve as a diary of your favorite meals.

When Dish.fm relaunched in December, it supported just two cities ( New York and San Francisco) with a total of 3 million reviews analyzed. In March, the company added 13 more cities, and today it has 865 cities on board, with over 8 million reviews analyzed, as well as 8 million plus photos. Over a million of the app’s dishes have votes – meaning users have said the item is “awesome” or “awful.”

In tests, resetting the city to somewhere else in the world outside of your own, was still a little buggy – a couple of times after making the switch and tapping the results, the app would still show my last searches on the screen. But an additional attempt would correct the problem, so it seems like there might be a couple of bugs left to squash. (Your mileage, as they say, may vary.)

The updated version of Dish.fm, available for iPhone and iPad, is available now here on the Apple App Store.

The rise of cooking shows made the guidance of professional chefs widely available, turning ordinary at-home cooks into culinary masters. Panna has raised $1.35 million to make the connection between chefs and home cooks even stronger.

Panna is a digital cooking magazine for iPhone and iPad that features high-definition video lessons led by highly acclaimed chefs like Rick Bayless, Jonathan Waxman, and Anita Lo. An issue is released every months and contains 13 seasonal video recipes from the participating chefs. The emphasis is on home-cooking, so each chef guides the user step-by-step through their favorite recipes in a home kitchen environment.

“It’s inspiring to help anyone create amazing food for someone they care about, and that matters,” said founder David Ellner in an email. “People are always looking for inspiration around recipes to find new ways to impress the people they’re cooking for. Panna uses the best chefs to provide this inspiration. I’m trying to transform the way people follow recipes and give people recipes that are guaranteed to be delicious. I want people to cook more and build their confidence around cooking.”

The app includes highly visual, drool-worthy photography of lacquered chicken, lasagna, and caramelized cauliflower, to name a few. The content is highly curated, and the chefs not only provide basic instructions, but also little tips and tricks and suggestions, like how to cook for company or making the perfect biscuit, and shopping lists. Ellner said that Panna bridges the gap between traditional cookbooks and sites like YouTube which are not curated and often have lower production quality. It was named one of the best apps of 2012 by Apple and chosen as an Editor’s Choice in the app store.

The popularity of shows like Top Chef and the expansion of the foodie movement has led to increased interest in cooking tasty, high-quality food at home. Whether it is for a dinner party or a casual Sunday supper, people are excited about whipping up restaurant-quality food in their own kitchens. Panna caters to this crowd and provides chefs wider opportunities to engage with an audience. The first download is free and after that, individual issues are $4.99 with a year’s subscription for $14.99. Content never expires and each issue also contains one free recipe.

Ellner said that his biggest challenge with Panna is getting people to pay for content in an area where so much content is free. However, since the target audience is people who are passionate about food and the product is “worth it,” this should not be an obstacle to continued growth. Before founding Panna, Ellner spent 25 years as an executive in the media industry and brought his experience with video content and digital technology to make Panna as beautiful and seamless as possible.

Anthem Ventures led this round, with participation from Lerer Ventures, Crosslink Ventures, Maveron, Advancit Capital, RSL Venture artiness, Launchpad LA, David Tisch’s BoxGroup and angels. Panna is based in Hoboken, New Jersey. The company previously raised $435,000 and partnered with  brands like Sur La Table and Whole Foods to include new chef segments on cooking equipment and vegan friendly meals.

This round will be used to expand the team, produce new content, and accelerate marketing and sales efforts. Panna is currently expanding to Android, and the June issue will feature live fire Mexican grilling recipes.

Check out this video from Jonathan Waxman (pictured above) about how to make a perfect apple tart.

Photo Credit: Panna

Filed under: Deals, Lifestyle, Media, Mobile

Fake meats have been around for years, but a new crop of Bay Area startups backed by tech investors think they can make meat substitutes good enough to compete with the real deal. Beyond Meat — backed by Twitter founders Evan Williams and Biz Stone via their company Obvious Corp — created an eerily accurate chicken substitute, for example.

But the most ambitious project is Rob Rhinehart‘s cheekily named “Soylent,” an attempt to replace food entirely with a liquid shake that has all the protein, fat, carbohydrates and micronutrients you need. The only ingredients recognizable as food are salt and olive oil. He claims to have lived exclusively on the stuff for a month. He says he has started eating real food again, but two months later he still gets 92 percent of his meals from Soylent.

Rhinehart makes an unlikely food scientist. He’s an engineer fresh off a stint at a Y Combinator-backed networking startup called Level RF that never exited stealth mode. He says he doesn’t have a background in chemistry. “Formally no more than an undergraduate level, but I am a huge proponent of self-study, online courses, and textbooks,” he says.

He decided to create Soylent because he was tired of spending so much time and money on food. “It takes me about five minutes to portion out all the ingredients at this point,” he says. “Without water it keeps for years so I could make it far in advance to save this time.”

He’s still working out the kinks. For example, he recently posted that he had run into some trouble with sulfur deficiency. Next Rhinehart is looking to do controlled experiments with a much larger sample base. “I have spoken to no biologist that doubts the feasibility of this,” he says.

But mainstream dietitians remain skeptical. “My short answer is that I don’t know any more about this product than the limited information provided on the product website,” says Diane Stadler, PhD, RD — a registered dietitian and assistant professor of medicine at Oregon Health & Science University. Stadler warns that although we know many of the essential nutrients in food, we don’t know everything and there’s a strong possibility that an elemental diet like this could miss something critically important. “I would not promote this type of diet to the general public, as there are many ways that it can go wrong, especially if consumed long-term,” she says.

Rhinehart’s defense is that people who don’t eat well are probably already missing important nutrients. But he admits it needs more testing. He’s already selling the mix to several people, and is seeking funding. “I need funding to scale up production and conduct more controlled testing,” he says. “I have received orders of magnitude more requests than I can possibly fulfill, which is lost revenue.”

There are already many meal replacement shakes on the market, but Rhinehart plans to offer cheaper, customizable products. “An athlete would need a lot of protein, an elderly woman doesn’t need many calories, and a coder or engineer type could elect to have nootropics included, if desired,” he says. “Meal replacement products can be even more expensive than traditional food. Soylent is already much cheaper, and due to the lack of real food sources, scales very well in manufacturing.”

Given the Valley’s current penchant for food startups, I wouldn’t be surprised to see him land a round. Besides Obvious Corp, Khosla Ventures and PayPal founder and venture capitalist Peter Thiel’s Breakout Labs are also in the game.

Khosla is backing Hampton Creek Foods, which has a product called “Beyond Eggs.” It’s also backing a few other food and agricultural companies, including artificial salt company Nu-Tek Salt and fake meat company Sand Hill Foods. Last year at TechCrunch Disrupt San Francisco Khosla went so far as to say that the artificial beef, which is made from soy protein, is still “beef.” At any rate, Anthony was pretty impressed with Beyond Eggs earlier this year. Khosla also has investments in a company working on alternatives to salt and a beef substitute. Breakout Labs has invested in Modern Meadow, a company that aims to “print” lab-grown meat and leather.

All of these companies are challenging the common nutrition advice to eat whole foods and vary your diet. In fact all these projects fly in the face of current food trends that advocate whole, unprocessed foods. Both the Michael Pollan, “eat food, not too much, mostly plants” set and the Paleo set both agree that it’s best to avoid processed food and just eat what nature gave us.

But the implications could be wide for the world. I try to eat natural whole foods, but I always feel a bit uncomfortable hearing from organic food zealots and the anti-GMO crowd. Fresh organic food is expensive, and cooking meals from scratch is time consuming. And there are, y’know, starving people out there who would love to get at some highly processed, genetically modified soy.

“I think humanity has been running on the equivalent of crude oil for ages,” Rhinehart says. “Imagine creating an efficient source of fuel for every living human, alleviating global hunger and malnutrition, reducing the environmental impact of farming, performing research on poorly understood biological mechanisms and potentially bringing agricultural societies in to the global economy.”

“Eat food. Not too much. Mostly plants.”

–

Michael Pollan