Back in August, we introduced you to OrderAhead, a Y Combinator grad and mobile ordering solution that had just raised $2.3 million from Facebook co-founder Adam D’Angelo, Ignition Partners, Matrix Partners, Menlo Ventures, Eric Schmidt’s Innovation Endeavors and SV Angel, among others. Today, along with some strong growth trends seen over the last few months, the startup is announcing that it has added to that number, bringing its total investment to $2.5 million, thanks to an additional $200K raised from Red Swan Ventures, the relatively new VC firm started by the Bonobos founders.
For those unfamiliar, OrderAhead is a free app for the iPhone that allows anybody to quickly order takeout from local restaurants. It’s pretty simple: Connect your chosen credit card to the app, order the food you want to eat later, then pick up the food with your name and phone number — free of charge. It’s not dissimilar to the experience you’re likely already familiar with when you order food from a favorite local Chinese restaurant, except the main difference is that you don’t have to wait in line.
OrderAhead focuses on takeout restaurants (of all varieties, though it privileges higher-quality restaurants), offering order-processing software to help them streamline the process and help customers avoid waiting in lines. But the long-term vision is, of course, to go beyond restaurants to re-invent all offline shopping, as OrderAhead eventually wants to be the easiest way to order and pay for anything anywhere on your phone — in realtime or in advance.
That’s still a long way off, but we’ve since caught up with the startup’s co-founder Jeff Byun to see how things have progressed, and it turns out OrderAhead’s footprint is expanding rapidly. The startup has signed 500+ merchants in the last five months and has just launched in Los Angeles this week (now in San Francisco, Silicon Valley and L.A.) with 25 merchants already on board.
The startup is using its tech to scale, a core focus as of now, with self-serve merchant signups beginning to pick up, Byun says. In fact, Head of Operations Ki Moon tells us that “they can’t onboard merchants fast enough.” And thanks to new hires like Danny Leonard, the former NYC manager at Groupon, the team is getting its head wrapped around how to scale quickly while maintaining the quality of its merchant pool.
In addition, Byun tells us that order volume is up 2.5 times over the last 60 days, and about a quarter of its users are placing at least one order every week. OrderAhead’s top user has ordered 200 times in the last 7 months and another has spent $10K over the same time. Part of the reason it’s been able to do this, the co-founders tell us, is by focusing on quick service and fast-casual restaurants that aren’t typically found on food ordering and delivery websites like GrubHub or Seamless, including (in the Bay Area), Nick’s Crispy Tacos, Umami Burger, Emmy’s Spaghetti Shack, Sweet Maple, Primo Patio Cafe, Dish-N-Dash, etc.
The startup’s recent partnership with Philz Coffee is another, perhaps better known, example, as users can “OrderAhead” at Philz to avoid waiting while their coffee is prepared while on the way to work, for instance, which is true for takeout or dine-in. Byun says another distinguishing characteristic of the merchants they look to partner with is understanding that the future of customer experience is mobile and, if they can follow through on that, this current growth trend is going to continue.
As we wrote in August, this (mobile) merchant-first ethos is being recognized by local vendors, as the startup’s VC and angel investors were complemented by strategic investment from local restaurant chain, Crepevine, which sees OrderAhead as a potential Amazon for the brick-and-mortar (restaurant) world.
Update: To celebrate its new partnership with Philz, OrderAhead is giving away Philz Coffee for one year. Readers who sign up in the next 24 hours and use the promo code (OA4TC) will be eligible to win one free cup of Philz coffee each day for a year. The winner will be announced tomorrow in the comment section.