For Qu CEO Amir Hudda, the recent funding announcement from Danny Meyer’s Enlightened Hospitality Investments is transformative, and brings a credibility factor to the point-of-sale player that’s about “something more than capital.”
“Having somebody like Danny Meyer as a business partner, you can’t buy that opportunity,” Hudda said during an interview at this year’s Restaurant Finance & Development Conference. “That’s a privilege we’ve been able to earn because of our existing investors and our team. If those two things weren’t in place, you can talk to as many people as you want, you have to have the right ingredients. You can’t make great food without great ingredients.”
Details of the investment were not released.
The Union Square Hospitality Group founder and chairman said that “apart from Qu, there has been limited innovation on the enterprise side of the POS market. As a result, a large portion of enterprise restaurants are still utilizing legacy, on-premises technology and cloud-based solutions like Qu are just starting to gain meaningful traction” as digital ordering has become more prevalent.
Meyer added that Maryland-based Qu is “extremely well positioned” to capitalize on these dynamics, “especially as more enterprise-scale restaurants look to upgrade to modern POS solutions.”
EHI focuses on investing in high-growth, category-leading companies, with an emphasis on technologies that fuel improved guest and employee experiences. The investment will enable continued innovation and product development for Qu’s suite of enterprise products—including in-store POS, kiosks, and digital ordering to drive-thru, KDS and unified menu management.
EHI joins Qu’s prominent roster of technology and hospitality investors including COTA Capital, Bobby Cox Companies and NRD Capital.
Hudda said from the perspective of his prior career in retail, thin margins in foodservice means that tech companies and investors can’t “go for every shiny object the minute it shows up.” Instead, he added, a slow and steady approach prioritizing stability is the key to help the industry evolve in a “responsible fashion.”
He added that the company hasn’t run out of things to build in the industry, but stressed that he will remain focused on core competencies, rather than branching out into adjacent categories like hotels or full-service restaurants.
Reflecting on a challenging post-pandemic phase for restaurants, Hudda said operators shouldn’t be faulted for macroeconomic factors beyond their control over these last two years. After such a huge boost in digital sales during the COVID years, we’ve now reached a point where analysts and others are comparing current volumes to “abnormal” times that were outside of the control of individual restaurant brands.
These recent years underscore how resilient U.S. consumers are, he added, predicting that we won’t see consumer spending falling off a cliff any time during the next 12 months.
Because this relative slowdown in guest frequency has given many restaurant tech investors cold feet, Qu is focused on building upon its homegrown technology stack and doubling down on complementary integrations rather than aggressively looking for companies to acquire. Hudda likened growth-through-acquisitions as “polluting our tech stack” and “something we wouldn’t take lightly.”
As a smaller provider amid a category of looming giants like NCR, Oracle, ParTech and Toast, Hudda said “the only thing we ask for is, give us an at-bat, put us in your lab and test us versus everything else you’re looking at.” That try-it-you-might-like-it request ties back into the important knock-on value that comes from bringing Danny Meyer and his team onto the roster. “If you like what you see, put us in a few locations and put us through the ringer.”
Asked about the impact of tech consolidation on restaurant operators, Meyer said that he prioritizes restaurants having the ability to choose best-in-class technology rather than being “limited by the flexibility of their tech stack, which is why a strong integration strategy is paramount to the success of restaurant technology companies.”
EHI tends to focus on scalable fast-casual concepts like Salt & Straw, Chip City, Tacombi, Slutty Vegan and Dig.
“We’ve found that once a concept has approximately 10 units across multiple markets, management teams start to take a more deliberate approach to scaling their business across real estate, leadership and technology,” Meyer said. “We’ve been incredibly impressed by Qu’s ability to create a more efficient operating environment for its restaurant partners as their businesses mature.”
Meyer also said that Qu will be an ideal partner for EHI’s own portfolio of restaurants as they emerge and “mature into organizations with a national footprint.”
Hudda pointed to the company’s many investors who he said have helped get the company to where it is, without being distracted by things like IPOs, M&A or other financial “exits.”
“Funding is the lifeblood of a startup and getting the right capital from the right investors at the right time is a prerequisite,” Hudda added. “So it’s phenomenal to get something like this to the finish line.”