Israeli digital catering startup Paidit has raised $1 million in its seed round. The round, which was closed today, was led by Madgera fund with participation from Udi Hillman and a number of kibbutzim. The company is developing an automatic digital online catering platform. The founders hope to take advantage of these features in competing with companies such as 10bis and Cibus, which control the market in Israel, and also to gain a foothold in the German market.
The company founders are CEO Eilon Elhadad, VP business development Daniel Khayat, and CTO Rotem Natan. Elhadad and Natan met during their army service in technological units. The company will begin offering its services to employers in Israel in the coming days and in Germany within a month. Paidit also has cooperation agreements with food chains, food markets, and restaurants, including BBB, Landwer, the R2M group, Go Noodles, Burgerim, Shuk Tzafon, Sarona Market, Ad HaEtzem, the Mozes chain, chef Yisrael Aharoni's Hiro Ramen, and chef Yonatan Roshfeld's Captain Curry.
Cibus and 10bis currently have an 80-90% share of the estimated $4 billion Israeli market. Elhadad says that Paidit's advantage over the competitors is the technological innovations that it brings to the catering services field. "We looked at the local market and the competition in it and realized that we want to bring this world to a much more technological place," Ehadad told "Globes." "First of all in organization - an organization that employs hundreds and thousands of workers has to produce a lot of catering cards, which is a headache in itself. Furthermore, managing the cards is a project that takes a lot of resources, with every change taking place vis-à-vis the customer service of the catering company. With us, the human resources managers can manage everything themselves through the application.
"We're also introducing technology from the perspective of the employees themselves. Today, a worker with a plastic card going to buy food, for example in Shuk Tzafon, comes and has to stand in line for something like 15 minutes. With us, there's no card; only an application. The worker opens the application, sees the menu, and orders through the application with no line. He also pays the bill through the smartphone."
Elhadad adds that the digital user experience and the automatic operation are made possible by an online connection of Paidit's platform to the checkout counter at restaurants. The platform is capable of connecting to most types of cash registers used in Israel. If necessary, the company provides a connectivity solution directly to the servers in the cash registers company. "No company in Israel is connected online with the cash registers like we are. We brought a lot of know-how from our military service in order to build infrastructure with an almost totally automated flow. We know how to do with a team of seven workers what the competitors are doing with dozens and hundreds of employees and to cut costs for restaurants. Our competitors charge the restaurant 6-12%; we charge a 3% commission," he explains.
The market in Israel is an old and long-standing one with 4,000 companies using similar catering services. In Germany, on the other hand, the field is almost non-existent; Paidit hopes to become the company that will establish catering services as a new industry in the country. Paidit plans to open an office in Berlin within a month. Since the company does not need many employees, the money raised will be used mainly for penetration of the German market. Elhadad expects the company to grow from seven to 14 employees during the year.
Published by Globes [online], Israel business news - www.globes-online.com - on June 26, 2018
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