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Nash's Hot Chicken is one of seven home-grown virtual brands offered by Acelerate as turnkey options for restaurants serving as host kitchens.

Virtual brand startup Acelerate raises $14.4 million to help restaurants generate incremental revenue with delivery-only menus

Here’s another player in the virtual restaurant game looking to help connect host kitchens with the right concept

The virtual brand startup Acelerate has raised $14.4 million in Series A financing led by Sequoia Capital, the Los Angeles-based company announced last week.

First launched in late 2019, Acelerate is one of a growing number of platforms in the virtual restaurant space. The company has a portfolio of turnkey delivery-only brands that restaurants can operate out of their own kitchens to generate incremental revenue.

Acelerate also offers a marketplace to match restaurants with brick-and-mortar brands that are expanding their reach with delivery-only menus. The platform, for example, is working with emerging chains like Curry Up Now, Big Shake’s Hot Chicken and the plant-based Unreal Deli to find restaurant partners interested in operating their menus as virtual brands.

And Acelerate provides the back-office technology for restaurant operators to grow a delivery-only business and manage their online storefronts across the various third-party delivery platforms. For example, Applebee’s is using the company’s software to grow its virtual brand Cosmic Wings.

Founder and CEO George Jacobs said he grew up in a restaurant family. His father founded Georgee’s Pizza in 1980 in the Los Angeles area, and Jacobs later worked as an executive with DoorDash.

“I watched the industry evolve, seeing restaurants reaching customers in new ways,” he said. “The traditional brick-and-mortar presence wasn’t as important anymore.”

At DoorDash, Jacobs said he saw restaurants facing margin pressures and profitability challenges. Online storefronts were getting harder to operationalize, as restaurants juggled delivery and dine-in service. “Restaurants were lying idle for a large percentage of even operating hours. We felt the best way was to introduce new brands,” he said.

Acelerate offers seven home-grown virtual brands under licensing agreements with restaurants interested in serving as host kitchens. Among them are Egghead Breakfast Burritos, Nash’s Hot Chicken, Salad Box and Wing Spot.

 Acelerate charges a flat 40% fulfillment fee, which includes marketing costs and delivery fees.

Jacobs said the funding round will allow Acelerate to build infrastructure and expand into more markets.

“We believe the best future is one in which restaurants are extremely successful and they’re maximizing assets and that provide the best value to customers,” Jacobs said. “We’re willing and capable of supporting different models and we’re excited for that flexibility.”

Contact Lisa Jennings at [email protected]

Follow her on Twitter: @livetodineout

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