Competition in the food ordering and delivery space is heating up.
ChowNow, a Santa Monica startup that creates online and mobile ordering platforms for restaurants, announced Wednesday that is has raised $3 million in funding led by local venture capital firm GRP Partners. Other local investors include Double M Capital and Karlin Ventures.
Christopher Webb, the company’s co-founder and chief executive, said ChowNow will use the funding to expand its sales team and develop more tools to offer to its restaurant customers.
The 16-person company, which was part of accelerator Launchpad LA’s third class of startups, has developed technology that lets restaurants take food orders from Facebook and mobile apps.
ChowNow works with national restaurant chains in addition to independently owned local eateries to create individually-branded apps and online ordering systems. Its service costs $89 a month.
ChowNow also wants to expand into helping its restaurant customers market themselves online. The company has been collecting data from people who order online to give the restaurants targeted advertising information.
“When you go to a restaurant, you eat, pay your bill and leave. The restaurant doesn’t know who you are,” Webb said. “But we’re collecting all this data. Using that data, we can build some cool marketing tools.”
But ChowNow has some stiff competition in the online food-ordering space. Seamless, in New York, has a popular food-ordering platform, and GrubHub, in Chicago, operates a website and app where people can search for local restaurants and order food for pickup or delivery.
Hollywood startup PayDragon is also trying to become a player in the online food delivery space, though it will also deliver grocery store items to a customer’s door.
Webb said ChowNow focuses on working with restaurants more than its consumer-focused competitors, many of which charge a 15 percent service fee for every order placed through their system.
The company also helps restaurants advertise that they have a new online ordering system, which Webb said helps in getting people to switch to their service.
“Once someone’s set up an account and places that first order, we see a lot of repeat business,” Webb said.