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How Miso Robotics went from scrappy fast-food robot startup to raising $37 million in VC, and why its founder will never give up on crowdfunding campaigns

Published by Business Insider on Tue, 23 Feb 2021


<p><strong><img src="https://static2.businessinsider.com/image/5f89c377d260780019341d96-2400/Team Member Next to Flippy ROAR at the Fryer_3.jpg" border="0" alt="Team Member Next to Flippy ROAR at the Fryer_3" data-mce-source="Miso Robotics" data-mce-caption="Flippy."></strong></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>Miso Robotics made headlines nearly three years ago when it debuted a burger-flipping robot, Flippy, at a fast-food restaurant in Southern California. Flippy was billed as the world's first autonomous robotic kitchen assistantone that would work alongside, not replace, restaurant workers.&nbsp;</p><p>Flippy became an instant celebrity, often drawing large crowds at CaliBurger in Pasadena, California, the fast-food chain piloting the robot.</p><p>"We did have people come into the shop every single day to come see the robot. There was a little bit of a cult following," Buck Jordan, president and co-founder of <a href="https://www.businessinsider.com/food-tech-startups-received-181-billion-from-investors-in-2020-2021-2">Miso Robotics</a>, told Insider.</p><p>A few months later Flippy, whose kitchen skills were expanding, landed a new gig as a fry cook at Dodger Stadium in Los Angeles.&nbsp;</p><p>At the time, fast-food operators told the startup that Flippy might help them solve multiple challenges: rising minimum wage, delivery boom, high operational costs, and labor shortages.</p><p>Yet, it was hard to get any serious takers for Flippy.&nbsp;</p><p>But as the pandemic turned into a months-long crisis, Jordan said interest in Flippy skyrocketed.&nbsp;</p><p>"Automation interest exploded with the pandemic," Jordan said.</p><p>One key problem Flippy can resolve in a health crisis is keeping employees socially distanced inside cramped kitchens.&nbsp;</p><p>"These tiny commercial kitchens are designed for elbow to elbow cooking," Jordan said. "Robots are the only solution that can address that."</p><p>Robots in the workforce have been a controversial subject. Unions say these autonomous kitchen assistants take jobs away from blue-collar workers. But the reality is, the fast-food industry has struggled for years to fill jobs.</p><p>By 2026, the <a href="https://www.bls.gov/careeroutlook/2017/article/occupational-projections-charts.htm" target="_blank" rel="noopener">Labor Department</a> estimates that the industry will have 262,000 openings for restaurant cooks, alone.</p><p>The industry also faces the possibility of a federal minimum wage hike to $15 an hour as part of a <a href="https://www.businessinsider.com/sanders-minimum-wage-coronavirus-relief-package-reconciliation-2021-2">proposed $1.9 trillion COVID-19 relief package that congressional Democrats are hoping to pass.&nbsp;</a></p><p>Miso Robotics <a href="https://invest.misorobotics.com/faq" target="_blank" rel="noopener">tells</a> investors that Flippy can tackle kitchen work that "many workers don't want to do."</p><p>Jordan said the AI-powered robot allows operators to redeploy staff for other roles created during the pandemic such as expediting curbside pickup and delivery orders.</p><p><img src="https://static1.businessinsider.com/image/60353c93bed5c50011a2c151-2400/01 Buck Jordan President and Chairman - Miso Robotics.JPG" border="0" alt="Buck Jordan President and Chairman Miso Robotics.JPG" data-mce-source="Miso Robotics" data-mce-caption="Buck Jordan of Miso Robotics"></p><p>Understanding the changing needs of the fast-food industry is something White Castle prides itself on.</p><p>The burger chain institution had been in talks with Miso Robotics prior to the pandemic but no agreement was made until late 2020 when Flippy began working full time at a restaurant in the midwest.&nbsp;</p><p>White Castle said Flippy is not being used to replace jobs. The robot, instead, tackles repetitive and demanding frying duties.&nbsp;</p><p>Flippy, who doesn't call in sick or take breaks, is frying about 10 items including french fries, cheese sticks, chicken wings, onion rings, and breaded fish and chicken used on White Castle sandwiches. The robot frees up workers to tend to more hospitality-oriented tasks like helping fulfill <a href="https://www.businessinsider.com/food-tech-startup-lunchbox-helps-restaurants-reclaim-digital-sales-2020-12">off-premise orders</a>, a segment that is likely to remain in growth mode in a post-vaccinated world.</p><p>"We've always wanted innovation and something that should be about empowering people not replacing people," White Castle vice president Jamie Richardson told <a href="https://www.nrn.com/quick-service/white-castle-hires-robot-flippy-cook-fried-foods">Nation's Restaurant News </a>last year. "We think that the art and science that goes into running a restaurant these days is more sophisticated than it's ever been."</p><p>White Castle plans to expand the test to 10 stores later this year.&nbsp;</p><p>Investors are taking notice in Miso Robotics, and not just those on Wall Street.</p><p>The scrappy startup from California, whose key investor is Cali Group, sought funding last year through crowdfunding platform SeedInvest. By November 2020,&nbsp; the crowdfunding campaign reached $17 million becoming the highest-grossing technology deal ever featured on the platform, Jordan said.&nbsp;</p><p>"It's a major milestone," he said. "We had the highest single-day raise ever and we actually crashed the site on our last day."</p><p>Jordan said White Castle's pilot got the ball rolling.&nbsp;</p><p>"It's a big reason we saw investment dollars pouring in last year," said Jordan, who also serves as CEO of <a href="https://markets.businessinsider.com/amp/news/roundtable-retail-transformers-on-automation-stores-delivery-2021-2-1030109641">Wavemaker Labs</a>, a venture studio for early-stage startups that focus on disruptive "seed to fork" technologies.</p><p>With such enthusiastic interest from the general public, Miso Robotics recently expanded its Series C round into 2021 with the goal of raising $30 million. To date, the company has raised $37 million, with $18.6 million coming from equity crowdfunding.&nbsp;</p><p>Jordan said the crowdfunding effort is allowing "ordinary people" to get a shot at benefiting from his company with a minimum buy of about $1,000.&nbsp;&nbsp;</p><p>"Venture capital is the most elite sport or investment class in the world," he said. "Tech has never been more popular in the world than it is today. So, why can't ordinary Americans have access to the same highest performing asset class that all the one-percenters have'"</p><p>Jordan said Miso Robotics is using the capital to hire "incredible talent" as the startup continuously modifies Flippy to ensure it can be scaled for use in large national fast-food chains.&nbsp;</p><p>Last year, weeks before the pandemic swept the US, Miso Robotics introduced a revamped version of Flippy. Instead of being attached to a bulky food cart, Flippy now moves along a rail system installed over the hood of grills and fryers.&nbsp;</p><p>The company also dropped the price from $60,000 to $30,000.</p><p>Still, "some smart tech startup can't walk up to these franchisees and say, 'Hey, pay me $30,000 for a robot,'" Jordan said. So, Miso Robotics is now working to change the pricing structure to a monthly service fee.</p><p>"We plan to continue to price down the $30,000 over the next year to get us closer to a monthly robot-as-a-servicefee model, where we can eliminate a hardware cost having to be paid up front by the operator and have them just pay the monthly SaaS," Jordan told Insider in a follow-up email.</p><p>That pricing will be more accessible to chains as the company expects more fast-food outlets to pilot Flippy later this year.&nbsp;</p><p>"It'll work tirelessly nonstop for you. We're really trying to make it easy and friendly for operators," Jordan said.&nbsp;</p><p>&nbsp;</p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/roark-neal-aronson-private-equity-firm-growth-2021-2" >How Roark Capital's Neal Aronson won over franchisees to build a $54 billion fast-food juggernaut with brands like Arby's, Jamba, and Dunkin'</a></strong></p><p><a href="https://www.businessinsider.com/miso-robotics-founder-talks-flippy-crowdfunding-and-37-million-in-vc-2021-2#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/worlds-most-expensive-liquid-thoroughbred-horse-semen-2020-3">Why thoroughbred horse semen is the world's most expensive liquid</a></p>
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