Peach, one of Seattle’s tech-oriented food-delivery services, plans to use the funding to expand to other markets.
Lunch-delivery startup Peach has raised $8 million in funding from investors, including Seattle’s Madrona Venture Group and Vulcan Capital.
Seattle-based Peach plans to use the money in part to expand to Boston and, later, to Washington, D.C., said Chief Executive Nishant Singh. The company is also seeking a chief operating officer to help pilot the expansion.
As part of the latest round of fundraising, Madrona managing director Scott Jacobson will join Peach’s board.
“This money is going to be pumped into expansion and making Peach a more successful business,” Singh said.
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The Seattle startup, one of a number of food-delivery services that have popped up in the area, sends office workers who sign up for the service a text message each weekday morning with a link to a single selected dish. If a customer replies “yes,” the food will arrive for pickup at a predetermined office building.
The company has agreements to sell food from about 125 restaurants in Seattle and San Diego, Singh said. Peach takes 15 to 20 percent of each sale, which ranges from $10 to $13, and the restaurant keeps the rest.
As Singh pitches it, Peach provides a bulk-order boost to restaurants’ business during what would typically be slow periods.
The company’s algorithms estimate how many users will order each item to give the restaurant an idea of how much food it will have to prepare.
The window for orders closes midmorning, essentially starting the lunch rush early for the restaurant Peach has selected.
Singh, a former engineer at Amazon.com, founded the company last year with two Amazon colleagues. Peach employs 25 people and plans to grow to about 45 after hiring more developers and sales staff for new cities.
An important quality for the sales staff, Singh said he’s learned from the company’s work in Seattle, is knowing the restaurant business.
“We have to get our sales pitch down good,” Singh said. “We learned a lot in terms of how we should approach restaurants.”
Another early lesson, Singh said, is to use insulated bags.
“People don’t like cold food,” he said.