Cantaloupe, the Malvern-based digital payments and software services company for the unattended retail market, said Tuesday that it has acquired Delicious Nutritious, a Los Angeles micro-market payments company that operates under the trade name of Yoke Payments.
Financial terms were not disclosed.
Through the deal, Cantaloupe (NASDAQ: CTLP), which earlier this year changed its name from USA Technologies, adds a point-of-sale terminal and application specific to micro-markets that can be integrated into its Seed Markets platform. Micro-markets can be retail locations built to fit spaces the size of a walk-in closet, such as refrigerated cases containing food and beverages.
Seed Markets enables micro-markets, which are generally unattended, to manage their business through route scheduling, warehouse pre-picking, and reporting for markets, vending, office coffee and pantry services.
Cantaloupe CEO Sean Feeney notes that micro markets are the fastest-growing segment of the unattended retail industry. And while Seed Markets already provides logistics and payments services for thousands of micro markets, he felt the company needed its own point-of-sale software.
"With Yoke, we have a lot of customers in common," Feeney said in a Tuesday interview. "So it makes more sense to acquire them then try and create our own solution."
In April 2017, Cantaloupe started a pilot with Yoke, then a new company, by integrating the Seed Markets management and accountability software with Yoke’s self-checkout kiosks.
“Having worked with Yoke for the last four years, this acquisition was a natural progression of our relationship,” Feeney said. “Now we will be able to expand our micro market offerings to any location as we continue to invest in the space.”
Cantaloupe provides software for the unattended retail market such as vending machine companies, operators of micro-markets, gas and car charging stations, laundromats, metered parking terminals, kiosks and amusement parks. The software includes options for digital payments, digital advertising and customer loyalty programs, while providing retailers with help for their operations and inventory.
Yoke offers software for the self-service checkout experience at the point-of-sale that allows customers to scan, pay, and checkout from any mobile device or tablet. It can usually be found at micro-markets and unattended retail shops, inside corporate break rooms, gyms, hotels or wherever open-concept kiosks can fit. It claims to be able to simplify operations and reduce costs for small to medium businesses and enterprise customers looking to maximize existing locations. Its mobile capabilities creates a direct line of communication between merchants and consumers, enabling promotions, coupons, and loyalty and rewards programs.
Yoke co-founders Michael Johnson and Benjamin Thomas will continue to drive the company’s growth as members of the Cantaloupe team but a press release did not indicate what their specific roles would be. All three York employees will be joining Cantaloupe.
Micro markets have seen sizable growth in recent years, partly due to the fact that many food- and coffee-service providers are having trouble finding labor. So unattended retail locations offer a way to make money without needed to hire employees.
USA Technologies acquired San Francisco-based Cantaloupe Systems for $85 million in 2017. Feeney was named CEO of USAT in May 2020 after a months-long proxy battle launched by its largest investor, Hudson Executive Capital. USAT had been dealing with strife for a few years, such as delayed annual reports and declining stock value. That led Feeney to seek a fresh start for the company, precipitating the name change. It already owned the rights to the Cantaloupe name, making that a logical choice.
According to Cantaloupe’s latest quarterly earnings report for the period ending March 31, the company’s revenue was relatively flat at $43 million when compared to the same period of 2020. It reduced its operating loss from $10 million to $2 million and its net loss from $9.6 million to $1.8 million. The company said the improvement has been driven primarily by a $6.5 million reduction in operating expenses.
Moving forward, Feeney said Cantaloupe will focus on continuing to improve efficiencies while still making investments in innovation. He expects to see the company's financials continue to improve but did not offer a timetable for reaching profitability.
