1X Technologies Raises $100M for Robotics
Toast fee increase looms, 2023 egrocery sales, honoring fallen couriers
Today’s edition is mostly about money: big fundraising by a robotics startup, the possibility of a fee increase for Toast users and the final 2023 numbers for online grocery sales. But then we’ve also got a very human story at the end, please don’t miss it.
This newsletter will skip Monday’s edition for MLK Day, we hope you’ll take some time off as well (and perhaps spend a minute thinking about why certain political factions may be trying to eliminate the holiday.)
This week’s edition is brought to you by DisplayRide.
Today:
Robotics Startup Raises $100M While Others Falter
Toast Fee Increase Likely Looms
Chart Time | eGroceries hit $95.8B in 2023
Honoring Fallen Delivery Workers
ROBOTICS | Mixed Funding Bag for Automation Startups
While this week’s CES might have you thinking it’s smooth sailing for all things robotics, some companies are still struggling. Despite raising $8 million, Dextrous Robotics just folded after four years in business. The company had an innovative “chopstick” style robot named DX-1 that could quickly load and unload boxes from vans and trailers. While the company won government grants and its HQ in Memphis meant it was likely to do business with big logistics players, lately investors balked at its $300k bill of materials per unit.
The Big Picture: Other specialty robotics startups are still raising cash, as investors seek solutions for heightened labor costs, especially in the restaurant space. 1X Technologies just pulled in a whopping $100M for its humanoid NEO and EVE bots, which can walk, manipulate objects, and patrol spaces. The Series B has participation from EQT Ventures and Samsung NEXT, and comes less than a year after an OpenAI and Tiger Global led Series A. Others in the automation space are seeing green shoots as well. While Miso Robotics has had a rocky few quarters, it just opened a new automated hamburger and fries joint in Pasadena, CA.
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PAYMENTS | Toast Fee Increase Likely
Analysts that cover restaurant POS have reached a consensus that the software company is likely to raise rates in 2024, after signaling its intention to do so for a couple of quarters. Given how poorly an attempted roll out went last year, after a decade of essentially flat prices, its expected the company may take a different approach this time. Instead of jacking up prices for all users, Toast may tack the price increase onto subscription renewals, tying the raised rates to new features that come with it.
The Big Picture: Last year, Toast covertly added a 99 cent fee, paid by the customer, to all orders of $10 or more. Customers revolted, and competitors like Square pounced on the mishap. Since then the company’s longtime CEO has stepped down and profitability remains elusive despite strong revenue growth. With over 99,000 locations served and the company serving as a linchpin for so many restaurant ordering solutions, the company is bound to break even sooner or later.
CHART TIME | 2023 Online Grocery Sales Hit Dip
Our friends at Brick Meets Click have a new chart on online grocery sales, but instead of their monthly tracker, it’s a big annual update. As you can see, the overall industry cooled by about 1%, as things continue to stabilize post-pandemic. Delivery and pickup held steady, with the real problems lying in “ship-to-home” aka meal kits by mail. While overall egrocery AOV (avg order value) and MAU (monthly active users) rose mildly, order frequency slipped more.
POLICY | Remembering Fallen Delivery Workers
The NYT has a touching story today, chronicling the tales of food delivery workers who tragically lost their lives on the job. While white-painted “ghost bikes” denote fallen bicyclists nationwide, in the Big Apple many of them are now specifically associated with third party delivery. Sergio Solano, who runs the “El Diario de Los Deliveryboys en La Gran Manzana” Facebook group, estimates at least 40 food couriers have died since late 2020. A city study found the industry had 36 deaths per 100,000 workers, far deadlier than sectors like construction.
The Big Picture: Part of the rationale behind the city’s recently enacted pay increase for delivery workers wasn’t just to improve the economics for workers, but to make it a safer profession. By changing the pay model from per-order to per-hour, workers won’t feel overly compelled to rush on city streets, meaning they’ll have time to follow stop lights and strap on safety helmets. “I’m not in a rush [and] I'm getting more money,” noted Alejandro Grajales, who delivers for Uber and DoorDash. Other workers are taking to TikTok to note their new, safer behaviors.
A Few Good Links
Grubhub to pay back MA. restaurants $3.5M in pandemic-related overcharges. House Republicans vote to overturn NLRF joint employer rule, but Senate passage looks iffy. CVS closing some in-Target locations. GreenPower sells 10 more EV cabs / chassis. 7-Eleven gobbles up 204 Stripes Stores around West Texas, NM and OK. CT Senator Murphy and Teamsters call out Amazon over delivery driver treatment. TX receives $70M in hydrogen station grants as feds seek corridor to SoCal. Grocery shoppers want product-specific promos. VinFast previews small electric pickup. Hyundai showcases new air taxi.
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