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 Takeaway.com, 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.

https://twitter.com/racheluranga
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Standing Together Through the Flames

🔦 Spotlight

To our Los Angeles family,

This week’s wildfires have brought immense pain and hardship to our beloved city. Many of our friends, neighbors, and colleagues have faced evacuations, power outages, and the devastating loss of homes and livelihoods. Our hearts go out to everyone affected by this tragedy.

At dot.LA, we want to express our deepest sympathy to those suffering in this moment. We see your resilience and stand with you during this challenging time. This community has always been defined by its strength and compassion, and now is the time to come together in support.

If You or Someone You Know Has Been Impacted, Resources Are Available:

Evacuation Shelters:

  • Calvary Community Church: 5495 Via Rocas, Westlake Village, CA 91362
  • Ritchie Valens Recreation Center: 10736 Laurel Canyon Blvd., Pacoima, CA 91331
  • Pan Pacific Recreational Center: 7600 Beverly Blvd., Los Angeles, CA 90036
  • Westwood Recreation Center: 1350 Sepulveda Blvd., Los Angeles, CA 90025
  • Pasadena Civic Auditorium: 300 East Green Street, Pasadena, CA 91101
  • Pomona Fairplex: 1101 W McKinley Ave, Pomona, CA 91768
  • Stoner Recreation Center: 1835 Stoner Ave, Los Angeles, CA 90025

Animal Shelters:

Small Animals:

  • Agoura Animal Care Center: 29525 Agoura Rd, Agoura Hills, CA 91301
  • Baldwin Park Animal Care Center: 4275 Elton St, Baldwin Park, CA 91706
  • Carson Animal Care Center: 216 W Victoria St, Gardena, CA 90248
  • Downey Animal Care Center: 11258 Garfield Ave, Downey, CA 90242
  • Lancaster Animal Care Center: 5210 W Ave I, Lancaster, CA 93536
  • Palmdale Animal Care Center: 38550 Sierra Hwy, Palmdale, CA 93550

Large Animals:

  • Pomona Fairplex: 1101 W McKinley Ave, Pomona
  • Industry Hills Expo: 16200 Temple Ave, City of Industry, CA 91744
  • Antelope Valley Fair: 2551 W Avenue H, Lancaster, CA 93536
  • Los Angeles Equestrian Center: 480 W Riverside Dr, Burbank, CA 91506
  • Pierce College Equestrian Center: 7100 El Rancho Dr, Woodland Hills, CA 91371

Disaster Relief Information:

  • LA County Assessor: Information for property owners and FAQs about disaster relief.

Mental Health Support:

  • Los Angeles County Department of Mental Health: Crisis counseling and support for those affected. Access services through their website or call their hotline at (800) 854-7771.

Temporary Housing Support:

  • Airbnb: In partnership with 211 LA, offering free temporary housing for displaced residents. Spaces are limited; complete the form to be notified of availability.

Transportation Support:

  • Uber: Use promo code WILDFIRE25 for 2 free rides up to $40 each to/from active shelters.
  • Lyft: Code CAFIRERELIEF25 offers 2 rides up to $25 each for up to 500 riders, valid until 1/15.
  • Metro: Fare collection is suspended systemwide.

Staying Informed:

  • Watch Duty App: Provides real-time wildfire tracking, evacuation warnings, and updates.
  • Los Angeles Fire Department Alerts: Visit their website for the latest information on fire status and safety guidelines.

Safety Precautions:

  • Ready, Set, Go!: Personal Wildfire Action Plan by the Los Angeles County Fire Department.

To those in our community who are volunteering, donating, or offering aid in any form—thank you. Your efforts embody the spirit of LA: strong, compassionate, and unstoppable.

At dot.LA, we’re committed to amplifying stories of resilience and support. If you’ve seen inspiring acts of kindness or have resources to share, please let us know. Together, we can shine a light on the incredible ways this community is stepping up during these trying times.

In the days ahead, let’s hold tight to the bonds that unite us and remember that we are stronger together. The fires may scar the land, but they cannot dim the collective spirit of Los Angeles.

We’re here for you, and we’re with you.

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    A Strong Finish to 2024 for LA Tech: Crosscut Ventures Leads the Way

    🔦 Spotlight

    Happy Friday LA!

    As we close the book on 2024, Los Angeles has had a remarkable year in tech and venture capital. From groundbreaking funding rounds to industry-defining innovations, the city’s tech ecosystem has showcased its ability to adapt and thrive. Among the year’s final highlights was the announcement that Crosscut Ventures, one of LA’s premier early-stage venture capital firms, has added Jon Ylvisaker as its newest Partner.

    Crosscut Ventures’ Bold New Direction

    Announced in late December, Jon Ylvisaker’s appointment reflects Crosscut Ventures’ commitment to advancing its focus on the energy transition. Ylvisaker brings decades of experience in driving investments in energy technologies and digital infrastructure. As the founding partner and managing director of Yield Capital Partners, he led investments in startups and established companies shaping the future of sustainability. At Wolfacre Global Management, a Tiger Management hedge fund, he further honed his expertise in supporting impactful climate-focused solutions.

    Brian Garrett, Managing Director and Co-Founder of Crosscut Ventures, said, “Jon's extensive experience in climate and digital infrastructure investments, coupled with his impressive track record of bringing groundbreaking technologies to market, makes him the ideal partner to help lead our focus.”

    Since its founding in 2008, Crosscut has played a key role in shaping LA’s tech landscape. Ylvisaker’s addition reinforces the firm’s commitment to addressing global challenges like energy transition and sustainability, further solidifying its leadership in venture capital innovation.

    What’s Next for LA Tech in 2025

    The momentum from 2024 has set the stage for an even bigger year ahead. Entrepreneurs, investors, and innovators in LA are poised to take on new challenges and create meaningful change across industries.

    As we step into 2025, we want to thank everyone who helped make 2024 such a standout year. Here’s to another year of progress, innovation, and success. From all of us at dot.LA, Happy New Year!

    🤝 Venture Deals

    LA Companies

    • First Resonance, a company specializing in digital manufacturing software through its ION Factory OS, has raised a $20M funding round led by Third Prime with participation from Blue Bear Capital and others. This brings its total funding to $36M and will be used to accelerate product development, grow its customer base, and enhance support for advanced manufacturing sectors like aerospace, robotics, and clean energy. - learn more
    LA Venture Funds
    • Finality Capital Partners led a $17M Seed funding round for ChainOpera AI, a California-based company developing blockchain networks for AI-powered agents and applications, to accelerate product development, expand its team and enhance its blockchain and AI integration capabilities. - learn more

    LA Exits

    • Thirteen Lune, an inclusive beauty e-commerce platform, has been acquired by SNR Capital, marking a significant milestone in the platform's mission to amplify underrepresented beauty brands while fueling its next stage of growth. - learn more
    • Ergobaby, a leading brand in juvenile products known for its high-quality baby carriers, has been acquired by Highlander Partners. The acquisition aims to bolster Ergobaby’s growth, expand its product offerings, and strengthen its position in the parenting solutions market. - learn more

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    Salt AI’s $3M Bet, Snapchat’s Creator Cash, Rivian’s EV Tech, and ŌURA’s $200M Win

    🔦 Spotlight

    Happy Friday, LA - let’s dive right in to this week’s highlights:

    Salt AI, a forward-thinking AI startup based in Los Angeles, has secured a $3 million seed funding round led by Morpheus Ventures with participation from Struck Capital, among others, to tackle the complexity of managing workflows.Salt AI's blog details how its platform centralizes tools like CRM systems, project management software, and data trackers into one interface, eliminating inefficiencies and freeing up teams to focus on meaningful work. With new funding in hand, Salt plans to scale its platform and expand its reach, a move that underscores how AI can solve everyday business challenges.

    Image Source: Salt AI - Aber Whitcomb

    While Salt AI focuses on the workplace, Snapchat is doubling down on creators, with its latest updates introducing revenue-sharing opportunities and direct monetization features. The company’snewsroom update outlines how enhanced analytics will help creators better understand their audiences and sustain their work. The platform's latest updates introduce revenue-sharing opportunities and direct monetization features, along with analytics that give creators deeper insights into their audience. By making it easier for creators to grow and sustain their work, Snapchat positions itself as a key player in the creator economy, offering features that rival platforms like YouTube and TikTok.

    Image Source: Snap

    On the roads, Rivian is redefining what it means to drive an electric vehicle. The company’s latest software update includes advanced route planning, energy management tools, and customization options that make every trip more intuitive and efficient. Additionally, Rivian has introduced new entertainment features, including Google Cast, YouTube, and SiriusXM, as featured in Rivian’ssoftware spotlight, enhancing the in-cabin experience for drivers and passengers alike. This isn’t just about convenience; Rivian is showing how thoughtful software design can elevate the entire EV experience, blending practicality with sophistication.

    Image Source: Rivian

    ŌURA is making headlines with a fresh $200 million Series D funding round, with participation from Fidelity Management & Research Company and Dexcom, which now values the company at $2.55 billion. This investment, as reported byBusiness Wire, highlights the growing demand for wearable health technology and positions ŌURA as a leader in the space. With its sleek design and emphasis on actionable health insights, the funding will enable ŌURA to expand its reach and further integrate wearables into daily health management, strengthening its position in the competitive health tech market. With this funding, ŌURA aims to reach more users and expand its capabilities, further embedding wearables into daily health management.

    Image Source: ŌURA

    Stay tuned as Salt AI, Snapchat, Rivian, and ŌURA continue to evolve, offering us new ways to work, connect, and live better.

    🤝 Venture Deals

      LA Venture Funds
        • Undeterred Capital participated in a $7M Seed funding round for Portal, a Watertown, Mass.-based biotech company specializing in advanced intracellular delivery technology to drive innovations in biological research and cellular therapeutics. - learn more
        • Vamos Ventures participated in a $7.9M Series A funding round for Culina Health, a Hoboken, NJ-based company that provides personalized, science-based virtual nutrition care by connecting patients with registered dietitians, with plans to use the funds to expand its offerings for dietitians and patients, implement AI-driven tools to enhance care efficiency, and strengthen its leadership team through key hires. - learn more
        • Humans Ventures participated in a $3.8M Seed funding round for Hamming.ai, a San Francisco-based company specializing in automated tools for testing and optimizing voice agents, with plans to expand its platform, enhance reliability and perform, and accelerate product development. - learn more
        • Fifth Wall led, with participation from Starshot Capital and others, in a $9.5M Series A funding round for Mojave, a Sunnyvale, CA-based company developing energy-efficient commercial air conditioning technology. The funds will be used to accelerate the adoption of its innovative systems and reduce energy consumption in the cooling industry. - learn more
        • ReMY Investors participated in a $17M Series B funding round for Scripta Insights, a company that leverages data analytics to help employers and healthy plans reduce prescription drug costs, with the funds aimed at expanding its platform and scaling operations. - learn more
        • Mantis VC participated in a $16.5M funding round for Nuon, a company specializing in Bring Your Own Cloud (BYOC) solutions that streamline AI, data, and infrastructure software deployment. The funds will support product development, readiness for general availability in 2025, and efforts to expand customer acquisition. - learn more
        • B Capital participated in a $102M Series C funding round for Precision, a company developing minimally invasive brain-computer interfaces to treat neurological disorders, with plans to use the funds to expand its team, advance clinical research, and refine its AI-powered brain implant for helping users with severe paralysis operate digital devices using their thoughts. - learn more
        • The Games Fund led a $3M Seed funding round for Dark Passenger, a Poland-based game studio founded by veterans of The Witcher 3 and Cyberpunk 2077, to create an unannounced, innovative, first-person multiplayer PvPvE stealth-action game set in a distinctive universe inspired by feudal Japan and martial arts cinema. - learn more

            LA Exits

            • Calliope Networks, a generative AI company providing licensed media content like movies, TV shows, and news, has been acquired by Protege to strengthen its platform’s capabilities in advancing AI development. - learn more

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