Chowbotics, a California-headquartered provider of robots for food service, has secured $11 million in a Series A-1 funding round led by Foundry Group and Techstars.
Also backed by Geekdom Fund, v1 and the Central Texas Angel Network, the infusion of capital follows a $1.3 million seed funding round in 2014 and a $5 million Series A round in March.
The Series A-1 capital will be used to build on Chowbotic’s progress with its “Sally the Salad Robot” offering, which is capable of combining 22 ingredients to produce salads in about a minute using instructions entered through a touch screen. The refrigerated machines measure 30 inches by 30 inches and plug into standard 110 volt electricity sockets.
Chowbotics plans to supply the robots to customers including cafeterias, convenience stores, restaurants, hotels and other commercial venues. The company’s plans call for the capital to support expansion from salads into food bowls such as grain bowls, breakfast bowls, poke bowls and yogurt bowls, among others.
Foundry Group partner and managing director Jason Mendelson called the decision to back Chowbotics, which was founded in 2014, “a no-brainer.”
“Chowbotics has released the first commercially available robotic food equipment in the industry,” said Mendelson. “We consider them the top company in the emerging space of robotic food equipment.”
‘Political hot potato’
Dr Deepak Sekar, Chowbotics’ founder and chief executive, told Agri Investor that thus far, the company has sold 25 units of Sally the Salad Robot, which cost $30,000 each. Many of the early purchases have been for office buildings, with companies interested in offering employee meal options during evenings, Sekar said, adding that sales have clustered around the Bay and Dallas areas, where Chowbotics maintains offices.
Sekar said that some of the new food types Chowbotics plans to expand into, such as grain bowls, only require software changes that are already being used by some of the company’s customers. Others, such as breakfast bowls, will require the addition of hardware, but will also open up new markets, according to Sekar.
“We are starting to see interesting applications in convenience stores,” said Sekar, who predicted that this segment of customers is set to expand significantly over the coming five to 10 years.
“The reason for that is convenience stores want to get into fresh food in a big way, they are losing out on that core revenue. Convenience stores can’t afford much labor to prepare food and at the same time, they want food 24/7, so a robot is ideally suited for that.”
Although private equity investors specifically have not expressed significant interest in Chowbotics due to its early stage of development, Sekar said the company has been well-received by an array of venture capital and institutional investors.
The main consumption trends propelling interest in Chowbotics, according to him, have been consumers’ increasing interest in healthy food and customization. Though Chowbotics has seen higher demand for its robots in metropolitan markets with high labor costs, Sekar said the company has deliberately avoided focusing on markets where replacing human labor is the main motivation for incorporating robotics.
“I don’t want anyone’s blood on my hands; I want to do good to the world,” he said. “It’s a political hot potato to develop robots that save labor, so we’ve made a conscious decision to go after the health and wellness market instead of the labor savings market.”