New Yorkers Gregory Swift and Heather Ryan were struggling with Orange County culture. “We knew it was different than Manhattan. We just had a hard time getting past pizza and Chinese,” Swift said. “We’re used to being able to get delivery from any restaurant, anytime. Here everything closes at 9 p.m. … And the DoorDashes and Grubhubs don’t have the restaurants we wanted.”
Borne out of hunger, the couple hatched the idea for their second careers—a virtual restaurant that makes restaurant-quality meals fresh daily, on demand and ready to eat. The site features a dozen menus from at least three to four chefs, posted daily at 10 a.m. and free delivery with a $15 minimum order.
The duo’s Swiftyrans LLC went live in September 2015 with Dish Republic.
“We started from zero, no database, like nothing,” Swift said.
But they knew they had a burgeoning market. Delivered food is estimated by Morgan Stanley to be a $30 billion market, and by McKinsey & Co. to be growing 20% annually. People are cooking less, “and millennials are working more hours than ever, so cooking less than ever,” Swift said.
App-driven food on demand isn’t new, of course—it’s already profitable. DoorDash and Grubhub are the best-known; Chicago-based Grubhub (NYSE:GRUB) has a $6 billion market cap.
Those are essentially delivery services for a slate of restaurants. They assist in trimming labor and marketing costs by ordering from one menu.
The virtual restaurants, by contrast, Green Summit in New York, ASAP Poke in Chicago, and Dish Republic in Orange County, are restaurants in low-cost commercial kitchens sometimes shared with other virtual restaurants; no wait staff, not even flatware.
Swift and Ryan, who initially staked their venture with $200,000 and put their first Dish Republic kitchen in Irvine, said that in two-plus years they’ve upped their conversion rate—site visitors who place an order—from 13% to near 30%; recent monthly sales are double from a year ago, and they report being “on track to do $1 million in the next 12 months.”
The pair plans to first scale the restaurant operations in OC and is looking for $1 million to tech up, including a new mobile and desktop site that “works like an app,” Swift said. He added that they “[have been] in touch with investors in New York, San Francisco and North Carolina who specialize in the industry and can do heavy lifting on the tech side. That said, we’d still like to find somebody local.”
They’ve forged some good OC food alliances—suppliers like Ingardia Brothers Produce Inc. in Santa Ana; Orange County School of the Arts for interns; Orange Coast College and its culinary arts program for some of their best chefs. But challenges remain.
“One problem with food is that it doesn’t scale well,” Swift said, pointing out that even in a commercial kitchen unconstrained by a fixed number of tables, etc., you can pump out only so many meals.
Their decision to start here has been validated.
“We seriously have some customers who’ve ordered 300 to 400 times,” Swift said. But some things don’t change.
“We thought we’d be serving till 10 p.m. We’re done by 7:30. Why doesn’t anybody want food at 10 o’clock at night? Most of our deliveries are before 6.”
— Pete Weitzner
VR Continues
Internet-based mortgage lender Cloudvirga in Irvine appointed Steve DeSantis chief financial officer. He was most recently chief financial officer at ShiftPixy (NASDAQ: PIXY), an employment management services provider that went public in June.
DeSantis will report to Chief Executive Michael Schreck, who replaced Bill Dallas in June.
The company’s flagship mortgage point-of-sale platform is designed to speed up mortgage approval time by automating the initial disclosure process.
The hiring came after Cloudvirga raised $15 million in series B financing in March. The round was led by Incenter, a Blackstone Group portfolio company.
— Sherry Hsieh
Bits & Pieces
Orange-based grandPad added new applications, including enhanced music offerings and Lyft ride request capability, to its tablets last month. A monthly plan costs $66 per month, an annual plan $49 per month. A subscription comes with a tablet, software and apps.
— Sherry Hsieh
