Investors have been eagerly funnelling funds into food service technology startups in South Korea as the industry undergoes rapid digital transformation. With the implementation of self-service systems on the rise due to soaring hourly wages and an acute labour shortage, startups like t’order Inc. have been reaping the benefits.
The Korean startup t’order Inc. recently secured 13 billion won (£9.6 million) from Korea Development Bank (KDB) and LB Investment Inc. in a Series B funding round. The company is aiming to raise a total of 30 billion won and is expected to secure the remaining 17 billion shortly. The fresh influx of capital will be used to increase the production of tablet PCs, which are in high demand as a self-ordering system in restaurants, with projected monthly orders exceeding 10,000 units. The company foresees significant growth in the near future.
The surge in food service technology adoption is rooted in the challenge of high labour costs and ongoing labour shortages. South Korea’s minimum wage has more than doubled since 2013 and stands at 9,860 won per hour. In addition, the country’s hospitality industry is facing a shortage of over 52,000 workers, with expectations that the shortage could persist for the next several years. As a result, many restaurant owners are turning to automation as a cost-effective alternative to hiring human workers.
Investors are also optimistic about the global growth potential of South Korea’s food service technology sector. Companies like Payhere Inc. and Aniai Inc. are already planning international expansion initiatives. Payhere Inc., a provider of food service automation solutions, is partnering with a major Korean fried chicken restaurant operator for global adoption of its point-of-sale (POS) system. Aniai Inc., a startup that develops cooking robots, has already secured deals to supply automated burger patty grilling systems to prominent U.S. burger franchise operators under non-disclosure agreements.
These startups have attracted significant investments, with Payhere securing 20 billion won in a Series B funding round and Aniai raising £12 million in Pre-Series A funding. Other players in the food service technology market, such as Changupin Inc. and Bear Robotics Inc., have also successfully secured substantial funding from investors.
While the increased adoption of food service technology in South Korea presents a lucrative opportunity for investors, it also aligns with the broader trend towards automation and digitization in the global food and beverage industry. The drive for innovation and efficiency in the face of mounting challenges has positioned South Korean food tech startups as key players in reshaping the restaurant landscape. As investments continue to pour into this sector, the future of dining and hospitality appears increasingly automated and tech-driven.
For further inquiries about this growing trend in the Korean food service sector, you may reach out to Joo-Wan Kim at [email protected].