Food delivery startups abound in the U.S., but few of them deliver to customers in “second cities” and smaller towns. From early pioneers like Grubhub to newer services like DoorDash, food delivery businesses have tended to focus on urban areas with a high concentration of restaurants and people who frequently order takeout.
Now, New Orleans Saints Quarterback, philanthropist and angel investor Drew Brees is backing a startup called Waitr to make takeout more convenient outside of the biggest cities. Waitr, which is based in Lake Charles and Lafayette, Louisiana, has been delivering food from restaurants to customers’ homes since 2014 in places like Lafayette, New Orleans, Tuscaloosa, Alabama, Sacramento, California and Beaumont, Texas.
Brees, who has been investing in startups for about five years, said, “The first thing that grabbed my attention about Waitr was the impact it had on one of our companies, Walk-Ons Bistreaux and Bar. It was increasing our sales at each location by 10 percent or more. As I began to learn more about the company, there was no doubt in my mind it would be a leader in food delivery.” The athlete-investor said Waitr proved the “fastest and most efficient delivery system,” versus competitors.
Altogether, Waitr now delivers to 18 cities in four states, said CEO and founder Chris Meaux, filling more than 50,000 orders each week for delivery or carry out. The company has signed white tablecloth restaurants and big franchises alike. Besides working with Brees-backed Walk-Ons, Waitr has deals with the Landry’s Inc. hospitality group and Buffalo Wild Wings, to name a few.
Meaux is proud of creating jobs in the Gulf region, and in any markets where Waitr expands, he said. The company has also kept its fundraising efforts local, thus far. Its newest $10 million round of funding brings Waitr’s total capital raised to $16 million. Joining Brees in the round were a number of other local angels.
Besides focusing on different geographies than competitors do, Waitr’s app offers a different user experience. The company sends a team of photographers out to a restaurant that signs on to the platform. They take photos of everything on the menu. “You order with your eyes,” Meaux said. “Our users tell us they go based on the pics more than the descriptions.”
The company will use some of its funding for geographic expansion, hiring and marketing. But it will also invest in building new features to make life easier for the people who work in restaurants. “Instead of going up to your table and asking who has the grilled salmon, we can use indoor GPS and precise location to tell you exactly where that dish needs to go. And we can use artificial intelligence not just to route our drivers, but to help restaurants predict how much traffic they can expect coming in the door, and what dishes are probably going to sell the best.”
Food delivery from restaurants and fast food chains racks up about $88 billion in sales worldwide each year, representing a mere 4 percent of sales of restaurant food, according to a 2016 report from McKinsey. And industry researchers expect online food ordering to grow, including beyond cities.
Waitr faces competition from Groupon-owned OrderUp, and other food delivery apps that have the resources to expand beyond big cities, from UberEATS to Amazon Prime.