Fairfax restaurant management startup MarginEdge has raised $4 million in a new funding round even as the restaurant industry reels from the continued Covid-19 pandemic.
Venture firm Osage Venture Partners led the round, which also included a new investor in Relish Works, the innovation hub for Gordon Food Service. The new round brings the startup’s total funding since its founding in 2015 to more than $15 million.
MarginEdge’s software allows its restaurant business customers to upload pictures of invoices and receipts to the platform for processing, while providing cost-tracking and paperless bookkeeping services. The software also allows customers to store recipes, pay bills, automate invoices and integrate its data into a restaurant's point-of-sale system.
MarginEdge took a number of steps as Covid-19 spread, including pausing billing for any clients forced to close their doors while still giving them access to the software. The company also designed a campaign to offer new customers its software at no cost until September.
“This strategy also allowed us to keep our team working, when many in our space were faced with mass layoffs,” said MarginEdge CEO Bo Davis in an email. “Over the summer we brought on a record number of new clients and when September came, over 90% of those newly onboarded clients became paying customers. At the same time, our existing clients started reopening and began to pay for our services again.”
Those efforts mean the company has now surpassed its pre-Covid revenue and is back on its pre-Covid growth trajectory of 100% growth year over year, and the new round was a preemptive raise based on the enthusiasm for the company’s future.
The funding will go toward continuing to develop its software, support sales and marketing, and also explore opportunities in payments and financial technology, the company said.
MarginEdge services over 1,500 independent restaurant clients in 37 states and has reached 2 million invoices processed and $2.5 billion in annual sales from their clients.
“As restaurant owners ourselves we viscerally understand the pain of the Covid pandemic. Putting real-time data in the hands of operators has always been important, and central to what we do. Now more than ever restaurants are looking for ways to plan, implement and measure changes in their businesses in the moment, not two weeks after the period ends," Davis, who owns Wasabi, a conveyor-belt sushi restaurant in Tysons, said in a press release announcing the raise. “From understanding food costs with changing supply chain dynamics, to measuring menu costs and new customer preferences, daily — we help our clients do more with less, which is unfortunately what most in our industry are faced with right now. I feel excited for our future and deeply grateful that our service can be a part of the rebuilding."
A previous version of this article misstated Davis's ownership of another business. He owns Wasabi sushi restaurant in Tysons.
