Signaling tough times ahead, ChowNow lays off employees

ChowNow, a startup that builds branded online ordering systems for restaurants, today announced layoffs internally, TechCrunch has learned. According to several sources who spoke to this reporter on the condition of anonymity, around 100 people were affected across teams, including onboarding, operations and sales.

"We, like every company, plan our annual budgets far ahead of the upcoming year. The budget we planned for 2022 was large and ambitious. Since then the economy and capital markets have changed, and so it's prudent that we adjust as well," founder and CEO Chris Webb told TechCrunch via email. "We made the difficult decision to lay off team members this week. We are deeply grateful for their contributions and they will receive our full support during this time of transition. These actions are never taken lightly, but we believe they are necessary in order to ensure the long-term sustainability of the company and our commitment to supporting local restaurants."

ChowNow launched in 2010 as a way for Webb and his friends to easily order delivery and pickup from smaller restaurants without an online presence. The company powers branded websites, apps, and social media accounts for restaurants as well as its own mobile and web ordering portals.

ChowNow takes care of payments and delivery through agreements with companies like DoorDash and local delivery startups like Jolt Delivery in Los Angeles. It also provides discoverability and marketing services, for example partnering with Instagram to make pictures and stories from restaurants shoppable by adding "order food" buttons and stickers to the restaurants' images and videos.

The Culver City–based company positions itself as a friendlier alternative to incumbents like Grubhub and Uber Eats, charging a monthly fee instead of the per-order commissions typical of food delivery businesses. ChowNow also promises that restaurants on its platform retain their own customer data for marketing and insights.

As of July 2022, ChowNow claimed it had over 22,000 restaurant customers across North America that were generating $2 billion worth of revenue combined through its platform. ChowNow has raised $64 million in venture capital to date, most recently a $21 million Series C round in 2019 led by 3L Capital and Catalyst Investors.

Economic headwinds have hit the online food ordering space hard as investors pull back from what they perceive as capital-intensive bets. DoorDash recently shut down Chowbotics, a salad robot startup, just a year after it acquired the company for an undisclosed sum. Elsewhere, "instant" delivery company Gopuff announced this week that it would cut 10% of its global workforce — about 1,500 employees — and close 76 of its U.S. warehouses.