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Dynamic pricing startup Juicer has raised $5.3 million as it looks to bring its pricing optimization technology to more restaurants. The seed funding found was led by venture capital firm York IE.
San Francisco-based Juicer uses AI, machine learning and historical sales data to adjust restaurants' menu prices in real time. Its products include a dynamic pricing tool that can automatically change a restaurant’s prices on third-party delivery apps based on demand. The system raises prices during busy times and lowers them during slower periods.
The data-driven approach has caught the industry’s attention as restaurants try to strike the delicate balance between driving traffic and protecting margins with their menu prices. Meanwhile, the growth in online ordering and digital menus has made real-time price adjustments feasible.
“Juicer is at the forefront of a fundamental shift in how restaurants operate and compete,” said Marshall Everson, VP of investments and strategy at York IE, in a statement. “They are solving immediate pain points by helping restaurants navigate the narrow canyon between rising cost and consumer price sensitivity.” Everson is joining Juicer’s board as part of the investment.
Dynamic pricing has been in the spotlight since Wendy’s said it planned to test the technology next year. The news sparked backlash over the prospect of Uber-like “surge pricing” in restaurants, and Wendy’s later clarified that it will only use digital menu boards to offer different items and deals throughout the day.
Juicer said it is not a surge pricing company but instead gives restaurants the ability to offer “data-driven happy hours.” Customers can benefit by getting lower prices at off-peak times, or pay a “modest premium” for faster service during busy times, when higher prices help limit bottlenecks, Juicer said.
The company said this flexible pricing strategy can increase same-store sales by 5% to 10%.
As for consumers' willingness to accept fluctuating prices, Juicer said that it has seen no pushback from customers. A recent report on restaurant technology by the National Restaurant Association found that 61% of adults have a very favorable or somewhat favorable view of dynamic pricing.
"The restaurant industry is at an inflection point, and operators who embrace the power of data and technology will be the ones to thrive in this new era," said Ashwin Kamlani, Juicer co-founder and CEO, in a statement.
He added that the company plans to use the seed funding to continue developing its technology and expand its staff.
The funding round included contributions from Augment Ventures, Mudita Venture Partners, Athletic Greens President Kat Cole, Kayak co-founder Paul English, 16 Handles founder Solomon Choi, former Postmates GM Andreas Lieber, ex-Two Roads Hospitality CEO Jamie Sabatier, Andy Phorzheimer of Kitchen Fund and Branded Strategic Hospitality.
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