SAN FRANCISCO (Reuters) – Financial services startup Ghost Financial announced a first round of investment on Tuesday as it rolls out banking-like products in the growing industry of “ghost kitchens,” restaurants dedicated to serving customers. customers through food delivery apps.
Ghost, based in Austin, Texas, said it raised $2.5 million from investors including HOF Capital, 305 Ventures, Hustle Fund and Active Capital. The company provides small businesses operating shadow kitchens with insurance, loans, credit cards and other financial products.
As food delivery grew in popularity during the pandemic, many ghost kitchens sprung up to meet the demand. They are separate from sit-down restaurants and focus on delivery only. Start-ups often buy their inventory with cash, check or debit card, rather than credit, hampering their growth, said John Meyer, managing director of Ghost Financial.
“What seems to be missing is a very clear banking and financial layer to support the ghost kitchen industry,” Meyer said.
Large restaurant groups such as Wingstop Inc have also embraced shadow kitchens in recent years, spurred by falling upfront costs and industry labor expenditures, Reuters reported.
Although the popularity of food delivery has taken off during the pandemic, there’s no sign the trend is abating, Meyer said, noting that some popular personalities such as YouTube star MrBeast have started to dabble in ghost kitchens.
(Reporting by Julia Love in San Francisco; Editing by Matthew Lewis)