Listen to this article 4 min
Byte Kitchen, a young San Mateo startup that works to scale independent restaurants via the company's Noshery food halls, has raised $6 million Series A to grow its retail footprint, technology and team.
The funding was led by Crosslink Capital, Emergent Ventures and Kevin Mahaffey and included participation from Correlation Ventures, Wndrco, Soma Capital and Y Combinator, where Byte was part of the summer class of 2021. Also chipping in were angel investors such as Shan Tsao (co-founder of Caviar), Bruce Dean (founder of Black Bear Diner) and Edna Morris (former president of Red Lobster).
The round is the only notable funding to date besides about $130,000 in cash from Y Combinator last summer, according to PitchBook.
Co-founders Divyang Arora, Rahul Madadi and Quinn McKenna opened Byte Kitchen's first Noshery food hall in December at 5 South Ellsworth Ave. in San Mateo and will hold the official ribbon-cutting for a second location — at 1754 Laurel St. in San Carlos — this month.
Similar to the propositions from Local Kitchens and All Day Kitchens, Byte seeks to remove the upstart risks and costs of brick-and-mortar expansion for small restaurants by installing their menus at Byte's food halls and creating an access point for dine-in, take-out and delivery for new customers. Restaurant partners license their recipes to Byte, which manages and operates the halls with its own staff, in exchange for a portion of the revenue at the hall.
The winning proposition for customers, Byte Kitchen contends, is the ability to mix and match dishes across various brands in one delivery order: tacos, curry, fries and ice cream to satisfy the vacillating dinner table or, as the verb "nosh" suggests, a single diner sampling a few things at once.
Divyang Arora, the startup's CEO, acknowledged that the market is "saturated with ghost kitchen and virtual brands."
"We believe product quality is what will win in the long run," he said in a statement. "We're committed to upholding the trust of our restaurant partners, from faithfully executing their recipes to maintaining strong relationships with customers."
In San Mateo the Noshery serves as dine-in and delivery outpost for eight brands, many of them Bay Area born: Oren's Hummus; The Little Chihuahua; the Melt; East Side Banh Mi; Kasa Indian Eatery; Curry House (from Asian Box); The Pastry Cupboard; and Humphry Slocombe Ice Cream.
A smaller selection is available in San Carlos, at least initially, per the food hall's website: Oren's Hummus; the Melt; The Little Chihuahua; East Side Bahn Mi; and Humphry Slocombe.
Sein Reiter, a director of brand revenue for The Melt, said in the press statement that Byte Kitchen's model "removes the capital risk and many of the challenges that come with opening new restaurants — enabling us to scale rapidly and efficiently."