Minnow, the company formerly known as Kadabra (and Veebie before that), has officially closed on $1.2 million in seed funding, more than the initial $1 million it targeted.
The company has developed a self-service, internet-enabled food kiosk, which it calls a Minnow pod, and companion smartphone app that allows people to browse a menu, and select and pay for a meal from its custom app (available for both iOS and Android). The meal would be waiting for the customer in a locked cubby, the identifying number of which would be shared with the customer on the app after the meal is paid for. The cubby wouldn’t unlock until the customer physically arrives at the pod to pick up their lunch.
The company is hoping to ride the trend of more and more people ordering food online for pick-up. The “online food delivery” segment is a $17 billion market this year, according to Statista. Thirty-three percent of Americans order takeout or delivery at least once a week, according to Steven Sperry, Minnow’s co-founder and CEO of Minnow, who also cited statistics from Statista. Added to that, he said over the last few years digital ordering and delivery have grown 300% faster than dine-in traffic.
“The Minnow pod was developed to help restaurants manage the growth in online and delivery ordering, and to help them meet customers’ demand for more convenience,” Sperry said. “To stay competitive, restaurants will have to adopt solutions that offer their customers more convenience.”
The company initially tested a prototype of its food pod in downtown Portland in October 2017 and earlier this year ran a more substantive beta test in Portland, Ore., in collaboration with Garden Bar, a ten-location fast casual salad concept. Nearly 300 customers participated in the beta test.
“The pods are designed for restaurants with a high volume of online ordering and delivery pickups, which tend to be located in larger cities and their surrounding suburbs,” Sperry told Maine Startups Insider when asked about why the beta was conducted in Portland, Ore., instead of Portland, Maine. “Having said that, we are talking to a couple of local [Portland, Maine,] restaurants that have significant takeout activity about beta testing our next generation pod.”
Maine Startups Insider in July initially reported on Minnow’s (then Kadabra’s) seed round and its ongoing beta test. That article was based off an SEC filing. However, strong investor interest led the company to subsequently keep the round open and raise an additional $200,000.
Sperry said they changed the name to Minnow because it was more in line with what they wanted their brand to communicate.
“We rushed the naming process when we changed from Veebie to Kadabra in order to meet a beta launch deadline,” Sperry said. “After we had a little time to reflect, we realized that Kadabra wasn’t the best name to communicate the brand we wanted to build. We choose Minnow because it’s friendly and approachable—like our pods.”
Elevate Capital, a Portland, Ore.-based VC fund, led the round with a $500,000 investment, while individual investors provided the remaining $700,000, according to the company.
“Minnow solves an important problem for restaurants, which is how to manage the increase in takeout orders caused by the emergence of food delivery services and changing consumer habits,” said Nitin Rai, Managing Partner of Elevate Capital. “Beyond that, Minnow’s pickup pods enable new business models for foodservice, food delivery, and retailing. Elevate Capital is delighted to partner with Minnow as they bring their innovative technology to market.”
Minnow said it would use the funds “to accelerate product development, marketing, and sales efforts.” It also said it planned to open an office in Portland, Ore. Michaela McVetty, who opened Sisters Gourmet Deli on Portland’s Monument Square in 2016 before co-founding Minnow, brought on two managing partners to operate the sandwich shop while she moved to Portland, Ore., to run Minnow’s operations there, according to her. She remains majority owner of the deli.
The company plans to deliver its first production-quality pickup pods in early 2019.
