On the heels of a nationwide rollout with Applebee’s, E la Carte has raised $35 million to bring its tablet technology to more restaurant tables around the country and around the world.
Previous investors Intel Capital and Romulus Capital returned to lead the round, which also included commitments from angel investor, entrepreneur, and Y Combinator head Sam Altman, and TriplePoint Capital.
As technology becomes increasingly embedded in every aspect of a consumer’s life, from a smart home to the smart phone in people’s pockets, there are certain public spaces which have been slow to adapt to the change that’s happening around them, according to E la Carte chief executive Rajat Suri. Restaurants have been late adopters, when it comes to bringing tech into the dining experience, he says, but that’s about to change.
“Your home is being transformed by Nest and other smart home companies. We see restaurants as a key area of daily life that has not transformed yet — especially the dining room,”says Suri. “One can imagine the restaurant of the future being very different. Restaurants should know what you want and when you want it.”
The 29-year-old Suri, a Toronto native, knows a bit about the restaurant business since dropping out of the Massachusetts Institute of Technology to wait tables at a local pub in Cambridge as research for his nascent startup.
Initially backed by angel investors including SV Angel, Dave McClure, Joshua Schachter, Ray Rodenstein and a New England Applebee’s franchiser Skip Sack, E la Carte, which is also a Y Combinator graduate, will use its latest financing to finance additional sales and marketing and product development.
The company’s “Presto” tablets allow diners to order and pay for food at their table, which Suri says enables waiters to concentrate more on the customer experience. Restaurants which have installed the company’s tablets have seen a roughly 5% increase in sales and an increase in table turnover of up to 7 to 10 minutes. So diners are spending more, and leaving faster — something that’s vitally important to both the rising fast-casual restaurant chains that are taking over the country and the local mom and pop shops that want to compete with them.
“Restaurants are a tough business,” says Suri. “for them to be able to increase sales is key.”
Already in 100,000 Applebee’s nationwide, the company has inked distribution deals with other chains like Genghis Grill, and other, undisclosed, national chains. And E la Carte isn’t the only player in the restaurant tablet game. Chili’s, the tex-mex hamburger chain owned by Brinker International, has turned to tablet manufacturer Ziosk to replace its menus with digital tableside tablets at its restaurants around the country.
E la Carte’s Applebee’s deal came after a two-year pilot program where Applebee’s tested the tablets across 30 restaurants around the U.S. During these trials, the company found that having tablets available tableside allowed them to reduce the overall table turn time and transaction time for their guests, and guests who were surveyed about the tablets reported a better overall experience.
The tablets have also managed to win over waitstaff, who have seen tips increase thanks to the suggested gratuity feature that’s part of the checkout process through the tablets. Like New York City taxi cabs, which require minimum gratuities of 20% to customers who pay with a card, the E la Carte tablets mean that waitstaff, like cabbies, can’t get stiffed when patrons pay their tab.
E la Carte is already seeing sales that will be in the double-digit millions by the end of the year, and will process nearly $1 billion in restaurant transactions. The company makes money by selling its tablets and software to certain restaurants, by charging restaurants a monthly subscription fee for the technology, or by distributing the tablets freely and charging for the games and music services that are embedded in its tablets.
The company opened its application programming interface to outside developers earlier this year, and has an ecosystem of dozens of companies designing apps for its tablets.
“Restaurants, of all of the key areas that haven’t been touched by technology, are potentially the fastest to change.” says Suri. “You might see more changes in the restaurant than in the home, because there’s a real business need to do that.”