Despite the challenges of the pandemic, his business saw its year-over-year revenue increase seven times more in 2020
This is the story of Nabeel Alamgir, a 30-year-old Bangladeshi-American based in New York City who believes he has the solution to helping restaurants reduce food delivery costs.
In 2019, months before the pandemic, he mulled over an idea amid people’s growing reliance on third-party platforms like Uber Eats and GrubHub, which charge up to 30% commission per delivery, reports enterpreuner.com.
Formerly a waiter for the restaurant chain Bareburger, Alamgir launched its “Lunchbox” online delivery service with the aim of helping restaurants reduce their dependence on third-party markets. Before that, he had tried two other startups.
Besides website and app design, Lunchbox also manages point of sale operations, online orders, marketing, loyalty programs and data analytics for restaurants.
From a team of 10 people in 2019, Lunchbox has expanded to a cohort of 160 employees and is looking for more.
Over the next year, Lunchbox wants to expand the virtual storefront to grocery stores, liquor and retail. The startup also intends to go global next year.
Alternative to chain restaurants and ghost kitchens?
Unlike most markets, which charge customers by order, Lunchbox offers a flat monthly fee per location for chain restaurants. “We help restaurants convert third party sales, GrubHub sales, into first party sales,” Nabeel explained.
Lunchbox customers include Bareburger, Clean Juice, Mexicue, Zaro’s Family Bakery, and Fuku. The focus is on chains that have between 10 and 100 restaurants.
“It’s not just about saving money, it’s also about increasing margins,” he said, adding that restaurants make about $ 25 in profit for every $ 100. spent by a consumer for Lunchbox, compared to $ 5 when sales are made through a third party. Platform.
In an effort to reach out to small businesses, Lunchbox has partnered with the C3 platform and created CitizenGo, an app where people can order directly from ghost kitchens. Nabeel believes that they have helped the chiefs of the minorities to expand their clientele.
The app offers pickup options on C3’s network, which includes around 200 communities. Delivery is available in Los Angeles, Northern California, New York and Chicago.
Fighting at the start
Nabeel, who was on the Forbes 30 Under 30 list, moved to the United States in 2005 at the age of 14. He began to work as a waiter in Bareburger to support his family.
He rose through the corporate ranks to become Bareburger’s Marketing Director. During the process, Nabeel gained first-hand experience with third-party delivery companies, observing their “predatory” practices and feeling that customers were being exploited.
$ 20 million in venture capital
In 2019, Lunchbox secured $ 2 million in seed capital, after being rejected by 72 investors. A year later, he raised $ 20 million, the largest Series A in the history of the food technology industry.
“By the time we switched to Series A, I already had 100 investors with whom we had established relationships,” said Nabeel.
The money was collected in a week, he added.
The techpreneur, however, lamented racism in the US venture capital space.
“As a dark-haired person, I’m not even considered a minority in tech,” he said.
Despite the challenges of the pandemic, his business saw its year-over-year revenue increase seven times more in 2020.
Train future entrepreneurs
Nabeel supports FirstGeneration, a non-profit organization that aims to build generational wealth, mobility, networks and capacity for immigrant and first-generation communities through entrepreneurship.
“If you want to please everyone, then go become a doctor.” If you can get feedback and have thick skin then go for it [and be an entrepreneur]. This is what entrepreneurship needs, ”Nabeel advised aspiring entrepreneurs.