Beverage automation tech company Sidework closed an additional $4.5 million in new funding, bringing its total raised to more than $10 million in seed. Formerly known as Backbar, Sidework also launched a rebrand to signal its evolution beyond being just a dispenser manufacturer – the company touts full beverage technology services, like helping manage inventory and selling ingredients, hardware and software through its new virtual marketplace.
The new round is led by Cherubic Ventures with continuing participation from Finistere Ventures, SOSV, Outlander Labs and Pathbreaker Ventures.
CEO
Sidework
“I think our fundraising success shows that VCs believe in our ability to build things people need for the hospitality industry,” said Sidework CEO Rishabh Kewalramani. “We’re going to use the capital to make hospitality businesses more fundamentally sound by continuing to test hypotheses and search for the underlying truths in them,” he added. “We’ve often heard that restaurants are ‘bad businesses’ or ‘bad investments’ and that’s created an incredible amount of whitespace in an industry so central to the social and emotional fabric of our society.”
There’s some truth to that. According to an IBISWorld’s single location full-service U.S. restaurant trend and forecast analysis report, post-COVID dine-in revenue has expanded at a CAGR (Compound Annual Growth Rate) of 2.7% to $233.6 billion over the past five years, but profit has wavered as demand still falls short of pre-pandemic levels. The forecast is brighter. From 2023 to 2028, industry revenue will grow at a CAGR of 1.3% to $249.2 billion, IBISWorld reports.
Automation for ‘Net Good’
Kewalramani believes automation will play a key role. Despite the likelihood in loss of bartenders and baristas, the tech will result in a “net good,” he shared. “Not only for owners and operators, but the rank-and-file service industry professionals, especially given the backdrop of extreme hospitality labor shortages. We market people as service industry professionals, get them in the door, and then turn them into physical laborers and manufacturers. A barista at a Starbucks or a bartender at a busy restaurant doesn’t get to serve or connect. Their human interactions are fleeting pauses between producing drinks. We can do better, and will. If we’re successful, there may be fewer shifts but we will have changed the nature of work for the better. I’ll make that trade every time.”
The company says its dispenser line comes with storage, pumping and refrigeration capabilities, allowing it to serve a wide array of beverages, including ones with fresh, highly viscous ingredients using pulp, dairy and more. Partnering venues can customize hardware to fit different-sized ingredient storage units and different levels of dispensing automation. Sidework also launched a new marketplace where venues can purchase larger-quantity ingredients at wholesale prices.
While Kewalramani isn’t disclosing the company’s current valuation, he did state that Sidework has grown 800% year over year with growth of more than 100% per quarter, earlier this year.
“We believe in Sidework’s potential to disrupt and elevate the beverage industry, which is an industry that hasn’t had technology upgrades for decades,” said Gifford Brown, Chief Customer Officer at Leahy-IFP, a national food and beverage manufacturing company. The company has installed about 50 systems, to date, including Lola 55’s downtown and Carlsbad locations.
“One of our core theses is that the hospitality industry is under-invested in. We want to solve this problem but also do anything else the industry might need to raise their bottom line and improve the nature of work for everyone involved,” Kewalramani added.
Sidework
FOUNDED: 2019
FOUNDER & CEO: Rishabh Kewalramani
HEADQUARTERS: Morena District
EMPLOYEES: 21
BUSINESS: beverage automation
FUNDING: $10 million (Seed)
WEBSITE: sidework.co
CONTACT: contact@sidework.co
NOTABLE: The new logo has an “s” and a “w” for “Sidework”, but if you look closely, there is a hidden jigger and strainer in the “s” and “w”.
