As Food Delivery Apps Struggle, Playa Vista-Based ChowNow Seizes The Moment

Rachel Uranga

Rachel Uranga is dot.LA's Managing Editor, News. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.

As Food Delivery Apps Struggle, Playa Vista-Based ChowNow Seizes The Moment

When the coronavirus struck, Jerry Garbus was compelled to close all but one of the three of the Manhattan Beach restaurants he managed: a steakhouse called The Arthur J. He funneled all the orders from his new takeout business to their kitchen and hoped for the best.

"Nobody had any data as to what kind of support or what kind of demand there would be during the pandemic," said Garbus, a director of operations for Manhattan Beach-based Simms Restaurants.

As part of the revamp, the upscale restaurant, which is co-owned by Michelin star chef David LeFevre, invested in new packaging Garbus called "vessels" to keep food from wilting and turning soggy. It also added family meals to its menus — plates ranging from $60 -$90 to feed four to six and a new farmer's market box was added to the lineup as well.

Garbus fared better than some of his peers. Simms eventually reopened the other two restaurants, Fishing with Dynamite and Manhattan Beach Post. Part of the reason the business was successful is because it had a loyal local following in an affluent neighborhood. But Garbus also knew, if the business was to survive, he had to do something different.

The company retooled their entire model, moving takeout from an afterthought to the center of their business. Garbus watched as delivery orders went from 1% of his business to nearly 100%.

Garbus was already using delivery apps, but he knew he couldn't rely solely on them; many orders required special handling so that the presentation and the food's freshness wouldn't be compromised. Moreover, there was a cost and efficiency factor.

"A lot of companies are paying 20% to 30% fees, which is extremely prohibitive," he said.

Garbus wouldn't say how much the cut is for the popular upscale restaurants he manages. It hardly mattered before the pandemic because delivery was such a small slice of business.

The company found itself needing to do more to automate their takeout orders.

"We signed up with ChowNow as soon as we were shut down for dine in," he said. "We needed to pivot very, very quickly and they were a big part of that."

Delivery Apps' Run on Restaurants

man with Uber eats backpack Photo by Robert Anasch on Unsplash

The lockdowns spurred by coronavirus have been a boon for delivery apps. With diners trapped at home and many too nervous to return to dining in, restaurants have had little choice but to rely on the apps for distribution. Still, the apps — and many of the restaurants they serve — have been losing money and are struggling to make their business model work. Grubhub just agreed to be acquired by Just Eat, a European food delivery company, in a $7.3 billion deal that would make it the largest food delivery platform in the world outside of China. Many see the move as a sign of more consolidation to come in food delivery.

Earlier this month, Postmates, Uber Eats and other apps got hit with another blow. Citing longstanding complaints from restaurant owners, Los Angeles capped service fees they could charge at 15% for the duration of the pandemic.

The move has put even more pressure on the delivery apps and follows similar efforts in other big cities, including San Francisco and New York, where demand for at home dining has spiked.

It's also opened up opportunities for competitors like ChowNow, a platform that helps restaurants build out their own ordering platforms, rather than rely on those built by services like Postmates and UberEats. The company has seen a surge in new business.

The Playa Vista-based company offers a flat-fee service that begins at $99 and offers online ordering for pickup and delivery through third parties. It has about 12 million diners on its platform and processes $200 million in orders monthly, and it has added thousands more restaurants as owners scramble to add delivery and takeout service.

"We were typically doing about 500 signups a month. Now we are doing 2,000," chief executive and co-founder Chris Webb said.

Webb took advantage of the moment to grow his nearly decade-old business. As ChowNow added members, the company hired nearly 100 new employees and is working on a series of new features that will make pickup and delivery services easier, including adding contactless orders and doubling down on building marketing for business.

The company had been in growth mode — having $62 million in venture funding under their belt— when the virus broke out. The recent surge in business helped it get to profitability, although Webb said he's not making any prediction for the year's end.

Still, he thinks coronavirus shifted the paradigm.

"Takeout is going to be a much larger percent of restaurants' business going forward," he said.

Some diners will be too nervous to head back to restaurants while the coronavirus rages; others who never purchased food online have now been converted to mobile ordering.

Takeout is Here to Stay

Garbus agrees. ChowNow helped him transform his business toward takeout. It's set up to be compatible with Instagram and Yelp, which allows restaurants struggling to gain visibility to build a profile on social media.

With some restrictions lifted, his restaurants are once again packed, but now at only 60% of their capacity. Takeout accounts for about 20% of his business and he said there are some menu items created during the pandemic that have gained popularity as to-go orders, including a giant shareable seafood plate named the "Mother Shucker" and a cheese and charcuterie spread.

"It's a huge, huge change. There is still a lot of demand (for takeout order)," Garbus said.

Webb thinks ChowNow can become the Shopify of the restaurant world, the ubiquitous ecommerce platform that powers online storefronts for small businesses and processes billions of dollars in sales worldwide. Its approach has made it simple for companies to set up an e-commerce infrastructure without having to give away a percentage of sales.

But its standalone nature is arguably the platform's biggest weakness, said Jared Drew Coven, co-managing director of LDR Ventures, which invests in consumer products, food and beverage, as well as online marketplaces.

"Shopify was a SaaS platform that allowed anybody to create a website. The problem is awareness," he said. "These bigger platforms (like Grubhub) create a lot of awareness" for small restaurants.

These delivery apps provide powerful marketing features for small companies that a simple app or software application can't match. That means that deep-pocketed restaurants and chains will always have an advantage.

ChowNow has been trying to counter that by developing better engagement tools for restaurants to keep customers coming back, working on contactless orders for open restaurants and making pickup more seamless.

Elyan Zamora, the owner of Cooks Tortas — a popular Mexican sandwich shop in the San Gabriel Valley — said she came to ChowNow because she didn't want to have to pay delivery apps.

"I like the fact they don't charge 30 percent," she said.

Zamora, who is in the process of franchising her restaurant, said the application helped her during the pandemic, when phone orders might have overwhelmed her staff because they can take longer to process. The company maintained most of its pre-COVID-19 business and she didn't have to lay people off.

With a software system in place, she could process pickups faster and she set up a pick up spot in front of the store.

"The phone is a lot more time consuming," she said. "They want to know what ingredients there are.

With this everything is right in front of them."

Do you have a story that needs to be told? My DMs are open on Twitter @racheluranga. You can also email me.

**Editor's note: This story has been updated to reflect more recent data on the number of users on the ChowNow platform. An earlier version also mis-stated a comment from ChowNow's CEO. It's since been corrected.
🤠Musk Picks Texas and 🔥Tinder AI Picks Your Profile Pictures
Image Source: Tinder

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Tinder is altering dating profile creation with its new AI-powered Photo Selector feature, designed to help users choose their most appealing dating profile pictures. This innovative tool employs facial recognition technology to curate a set of up to 10 photos from the user's device, streamlining the often time-consuming process of profile setup. To use the feature, users simply take a selfie within the Tinder app and grant access to their camera roll. The AI then analyzes the photos based on factors like lighting and composition, drawing from Tinder's research on what makes an effective profile picture.

The selection process occurs entirely on the user's device, ensuring privacy and data security. Tinder doesn't collect or store any biometric data or photos beyond those chosen for the profile, and the facial recognition data is deleted once the user exits the feature. This new tool addresses a common pain point for users, as Tinder's research shows that young singles typically spend about 25 to 33 minutes selecting a profile picture. By automating this process, Tinder aims to reduce profile creation time and allow users to focus more on making meaningful connections.

In wholly unrelated news, Elon Musk has announced plans to relocate the headquarters of X (formerly Twitter) and SpaceX from California to Texas. SpaceX will move from Hawthorne to Starbase, while X will shift from San Francisco to Austin. Musk cited concerns about aggressive drug users near X's current headquarters and a new California law regarding gender identity notification in schools as reasons for the move. This decision follows Musk's previous relocation of Tesla's headquarters to Texas in 2021.

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  • Penguin Random House agreed to acquire comic book publisher Boom! Studios from backers like Walt Disney Co. - learn more

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Top LA Accelerators that Entrepreneurs Should Know About

Los Angeles, has a thriving startup ecosystem with numerous accelerators, incubators, and programs designed to support and nurture new businesses. These programs provide a range of services, including funding, mentorship, workspace, networking opportunities, and strategic guidance to help entrepreneurs develop their ideas and scale their companies.

Techstars Los Angeles

Techstars is a global outfit with a chapter in Los Angeles that opened in 2017. It prioritizes local companies but will fund some firms based outside of LA.

Location: Culver City

Type of Funding: Pre-seed, early stage

Focus: Industry Agnostic

Notable Past Companies: StokedPlastic, Zeno Power


Grid110 offers no-cost, no-equity programs for entrepreneurs in Los Angeles, including a 12-week Residency accelerator for early-stage startups, an Idea to Launch Bootcamp for pre-launch entrepreneurs, and specialized programs like the PledgeLA Founders Fund and Friends & Family program, all aimed at providing essential skills, resources, and support to help founders develop and grow their businesses.

Location: DTLA

Type of Funding: Seed, early stage

Focus: Industry Agnostic

Notable Past Companies: Casetify, Flavors From Afar


Idealab is a renowned startup studio and incubator based in Pasadena, California. Founded in 1996 by entrepreneur Bill Gross, Idealab has a long history of nurturing innovative technology companies, with over 150 startups launched and 45 successful IPOs and acquisitions, including notable successes like Coinbase and Tenor.

Location: Pasadena

Type of Funding: Stage agnostic

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Notable Past Companies: Lumin, Coinbase, Tenor

Plug In South LA

Plug In South LA is a tech accelerator program focused on supporting and empowering Black and Latinx entrepreneurs in the Los Angeles area. The 12-week intensive program provides early-stage founders with mentorship, workshops, strategic guidance, potential pilot partnerships, grant funding, and networking opportunities to help them scale their businesses and secure investment.

Location: Los Angeles

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Notable Past Companies: ChargerHelp, Peadbo

Cedars-Sinai Accelerator

The Cedars-Sinai Accelerator is a three-month program based in Los Angeles that provides healthcare startups with $100,000 in funding, mentorship from over 300 leading clinicians and executives, and access to Cedars-Sinai's clinical expertise and resources. The program aims to transform healthcare quality, efficiency, and care delivery by helping entrepreneurs bring their innovative technology products to market, offering participants dedicated office space, exposure to a broad network of healthcare entrepreneurs and investors, and the opportunity to pitch their companies at a Demo Day.

Location: West Hollywood

Type of Funding: Seed, early stage, convertible note

Focus: Healthcare, Device, Life Sciences

Notable Past Companies: Regard, Hawthorne Effect

MedTech Innovator

MedTech Innovator is the world's largest accelerator for medical technology companies, based in Los Angeles, offering a four-month program that provides selected startups with unparalleled access to industry leaders, investors, and resources without taking equity. The accelerator culminates in showcase events and competitions where participating companies can win substantial non-dilutive funding, with the program having a strong track record of helping startups secure FDA approvals and significant follow-on funding.

Location: Westwood

Type of Funding: Seed, early stage

Focus: Health Care, Health Diagnostics, Medical Device

Notable Past Companies: Zeto, Genetesis


The KidsX Accelerator in Los Angeles is a 10-week program that supports early-stage digital health companies focused on pediatric care, providing mentorship, resources, and access to a network of children's hospitals to help startups validate product-market fit and scale their solutions. The accelerator uses a reverse pitch model, where participating hospitals identify focus areas and work closely with selected startups to develop and pilot digital health solutions that address specific pediatric needs.

Location: East Hollywood

Type of Funding: Pre-seed, seed, early stage

Focus: Pediatric Health Care Innovation

Notable Past Companies: Smileyscope, Zocalo Health

Disney Accelerator

Disney Accelerator is a startup accelerator that provides early-stage companies in the consumer media, entertainment and technology sectors with mentorship, guidance, and investment from Disney executives. The program, now in its 10th year, aims to foster collaborations and partnerships between innovative technology companies and The Walt Disney Company to help them accelerate their growth and bring new experiences to Disney audiences.

Location: Burbank

Type of Funding: Growth stage

Focus: Technology and entertainment

Notable Past Companies: Epic Games, BRIT + CO, CAMP

Techstars Space Accelerator

Techstars Space Accelerator is a startup accelerator program focused on advancing the next generation of space technology companies. The three-month mentorship-driven program brings together founders from across the globe to work on big ideas in aerospace, including rapid launch services, precision-based imaging, operating systems for complex robotics, in-space servicing, and thermal protection.

Location: Los Angeles

Type of Funding: Growth stage

Focus: Aerospace

Notable Past Companies: Pixxel, Morpheus Space

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🚁 One Step Closer to Air Taxis in LA
Image Source: Joby Aviation

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Joby Aviation, a pioneering electric air taxi company, has achieved a significant milestone by successfully flying a hydrogen-electric aircraft demonstrator for 523 miles with only water as a byproduct. This groundbreaking flight showcases the potential for emissions-free regional travel using vertical take-off and landing (eVTOL) aircraft, eliminating the need for traditional runways. The company's innovative approach combines its existing battery-electric air taxi technology with hydrogen fuel cells, paving the way for longer-range, environmentally friendly air travel.

For LA residents, this development holds exciting implications for future transportation options. Joby's technology could potentially enable direct flights from LA to destinations like San Francisco or San Diego without the need to visit conventional airports, offering a cleaner and more convenient alternative to current travel methods. The company's progress in both battery-electric and hydrogen-electric aircraft positions it at the forefront of next-generation aviation, promising to revolutionize urban and regional mobility.

Notably, Joby Aviation has already made strides in Southern California by securing an agreement with John Wayne Airport earlier this year to install the region's first electric air taxi charger. This strategic move sets the stage for LA to be among the initial markets where Joby will launch its electric air taxi service. With plans to commence commercial operations as early as 2025 using its battery-electric air taxi, LA residents may soon have access to a fast, quiet, and environmentally friendly mode of transportation that could significantly reduce travel times and traffic congestion in the region. In the not too distant future, LA might find itself in an identity crisis without traffic and excess smog 🤞🤞.

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