Two of the biggest drivers of growth on social and e-commerce platforms have been food and influencers, so it should come as no surprise that startups are now getting in on the act in trying to combine how these two work together. In the latest turn, a startup out of Berlin called Lanch — which teams up with influencers and creators to launch ad hoc food delivery brands — has raised $6.9 million (€6.5 million) in funding.
The startup’s influencer-paired food brands are cooked across “virtual kitchens” — that is, free spaces in existing restaurant and other retail kitchens, not ghost kitchens — and Lanch said that its first effort, a pizza brand called “Happy Slice” created with German YouTubers Knossi and Trymacs, sold more than 30,000 pizzas in its launch weekend, a happy slice that caught investors’ attention. It’s now gearing up for brand two, in a partnership with a German musician called Luciano, called “Loco Chicken.” Crazy times.
The Series A is coming from Felix Capital and HV Capital, with a number of individuals participating. Valuation is not being disclosed.
The concept may appear a little gimmicky. Take a person well known for anything but food and now attach that person’s brand to food: It just doesn’t sound like a foolproof recipe for success.
It doesn’t help that over in the U.S., where other startups are also testing out similar concepts, the execution appears to have left a very bad taste in some people’s mouths.
Virtual Dining Concepts, which has raised some $20 million (per PitchBook data), has teamed up with a bunch of well-known names since it launched in 2018. One of the biggest of them, MrBeast, is currently embroiled in a lawsuit against VDC, filed after his fans complained that MrBeast Burgers were “revolting” and “inedible” and VDC did not respond to MrBeast’s subsequent complaints. VDC is countersuing for $100 million. (The brand appears to remain operational despite all this: the website is still up over here in the U.K.)
There are indeed some strong similarities between Lanch and VDC. Both are based on partnerships with influencers to build food delivery brands. Those brands are then matched up with “virtual kitchens” — not quite ghost kitchens, but free space in kitchens that might be attached to other restaurants or food services — which in turn cook those items out of ingredients supplied by Lanch.
Both also outsource at the distribution end: brands are offered over food delivery platforms (in Europe think: Delivery Hero, Just Eat or Deliveroo) to bring to customers.
But Nono Konopka — who co-founded Lanch with Dominic Kluge, Jonas Meynert and Kevin Kock — believes that Lanch has a more tech-first approach than its U.S. counterparts that will give its business model the much-needed umami that it needs to zing, namely in the form of data.
“We focused on tech really early on,” he said in an interview, “building quality-control software that measures both qualitative and quantitative data.”
The aim, he said, is to give more insights to creators for them to connect with audiences but also understand what they like and want. For them, data is a huge asset in developing their audience and understanding what to do more or less in the future, as well as to build further sponsorships and other revenue-generating activities.
Lanch also passes data on to the other side of its marketplace, the restaurants that it partners with. One of the most important things for restaurants to get right is footfall and maximizing the use of staff and resources to avoid all waste: Lanch’s pitch is that it can help them get more efficient use of their kitchens, as well as significantly more immediate customer data on what is in demand; if anything is “revolting,” an alert to fix it; and more.
That hope is that all this will stave off any MrBeast-style scandals.
Lanch kicked off with 70 restaurants for Happy Slice, and it says it will ramp up to 100 for Loco Chicken. In the next year, it aims to have more than 500 locations in total. After that, it wants to extend beyond delivery to physical dining and other food-related products and experiences.
Restaurants get 1/3 of the takings, with the rest split between influencers, delivery platforms and Lanch itself. It says that its first brand, which has been live for about four months, has made around seven payouts already.
“The ‘power of brands’ is a core belief that we have had since the beginning of Felix,” said Frederic Court, the founder of Felix Capital. “Over time, we have built increasing conviction on the superpowers that creators have in today’s digitized world, and are impressed with Lanch’s distinct and innovative positioning, built on community.”
The company is working now on going live in Austria and has plans to extend to the U.K., Spain, Netherlands and France, where it will work with three or four creators per market, a much more digestible number, Konopka said.