I recently had the pleasure of speaking with Mathew Focht, the Founding Managing Partner of EMERGING and the founder of Consolidated Concepts and Emerging Concepts. For over 25 years, he has led the growth of numerous early-stage concepts and technology investments to a national scale.
He and his team launched the EMERGING Fund in March 2023; a growth capital firm focused on hospitality tech and high-tech experiential entertainment. What sets them apart is their 50 CEOs, industry titans who accelerate go-to-market strategies and GP relationships with 1 out of 3 restaurants.
Here, we’re looking at what they’ve accomplished these last two years, their developing portfolio, and where they’re headed.
Marisa: So, it’s been almost exactly two years since the EMERGING Fund came into existence. Since then, I’ve seen you in numerous publications, from NBC Boston to Crain’s Chicago Business, Restaurant Business, and more.
Can you share the fund’s focus as spring approaches and some of the companies that make up the EMERGING Fund portfolio?
Mathew: We’re working on many different fronts right now, specifically on two areas of the restaurant industry experiencing aggressive growth. One is the digitalization of the restaurant space and the AI technology being harnessed by companies.
Restaurants are trying to find ways to reduce the mundane task workload. These tasks don’t build relationships or enhance the customer experience. Today, they are turning to technology and AI to give them more time for guest interaction, not to remove an opportunity for guest engagement. There are a lot of AI solutions on the market that do both, but we have a heavy bias toward those that will give more time back to allow for more meaningful connection opportunities with guests.
We’re using technology to provide better guest experiences, not a race to the bottom. Some of the new technologies enhancing the guest experience and reducing pressures on staff and operators include:
Taiv.tv
Taiv is a technology company that enhances live television experiences by using AI and computer vision to customize content and tailor television advertising in bars and restaurants to the concept.
While you spend millions of dollars on your build-out, everyone’s eyes are on the TVs. Do you really want them to see an advertisement for Chili’s? Instead, you may want to show your signature cocktails, limited-time offers, and special events—anything that makes you unique.
You can also focus on advertisements that are on brand. For instance, elevated concepts may align better with advertisements displaying BMW, Mercedes, Ferrari, or Lamborghini dealerships versus Honda or Toyota. There’s nothing wrong with Hondas or Toyotas, but it’s about aligning the advertisements with your guests.
Many restaurants are also searching for better ways to communicate with their guests. Your customers may not use social media as often as other concepts, so you can use your TV to engage, entertain, and communicate.
Tablz
Tablz is another technology solution that empowers guests to tailor their dining experience. It elevates the guest experience by allowing customers to pick their desired table. It could be a special occasion, and they’d like a table with an exceptional view. For a little bit of money, they get the table that they want.
In the restaurant industry, the experience starts long before a guest walks into your door. Today, it begins online. Tablz enhances the initial touchpoint with a 3D online journey of your restaurant, enabling guests to view it in its entirety before selecting their preferred seating.
1Huddle
Another technology-forward company we’re excited about is 1Huddle. It provides a mobile game platform for employee training that makes learning fun, enabling restaurant owners to educate their staff to provide a better, elevated guest experience in a gamified way.
It also lets you recognize staff that provide better guest engagement because you’ll see it in the numbers. You’ll be able to quickly determine which staff is producing better experiences for your guests. Restaurants use 1Huddle to upskill employees, onboard new hires, and excite staff using a competitive and effective model.
Leasecake
Leasecake is another brand on the technology side and one of our newer investments. Restaurants are challenged to manage leases, service contracts, utilities, permits, and more. But spending your time dealing with these bills and leases doesn’t help you grow your top line.
Leasecake manages this aspect of the business, ensuring operators don’t miss an important date or renewal. Taking this off their plate gives them more free time to focus on the customer experience while ensuring they don’t make costly mistakes like forgetting to renegotiate an automatic renewal.
Botrista
Botrista continues to drive new revenue, generating up to $1 million of incremental revenue out of a three-by-three machine for restaurants and contract feeders. It’s hitting the mark as bubble teas and refreshers become more popular in the market, and the demand for cold drinks continues to increase.
In recent years, we’ve seen Starbucks’ sales go from 40% in cold sales to 70%. And we’ve also seen alcohol revenue at restaurants go down. Botrista offers restaurants the ability to serve quick, high-quality, healthier drinks in 20 seconds or less. It has become an awesome solution for anybody looking to serve higher-quality beverages fast.
Everything we do and all the companies in our portfolio are designed to improve customer service, provide better quality guest interactions, and drive top-line revenue and profitability.
Competitive Social Entertainment
The other area we’re focusing on that’s experiencing tremendous growth is dining out as entertainment. This type of experience goes by many names, including eatertainment, sportainment, leisure-based entertainment, and competitive social entertainment.
Diners no longer have to go to a sit-down casual dining experience to get better quality food. Chipotle and Sweetgreen give you great quality fast, and there are many others in that category. In fact, they sometimes have better quality than most casual dining restaurants.
These social entertainment concepts separate themselves because not only do they offer elevated food and beverages, but you also get to have fun and engage with others. Guests are surprised and delighted with something that is not ordinary but extraordinary. We see these experiential concepts as the future of the industry.
Some of the concepts we’ve invested in that align with this model include Puttshack, Flight Club, Batbox, and F1 Arcade. All these businesses center around sports and competitive social entertainment. You’ve got high-tech mini-golf, darts, baseball, and Formula 1 racing.
Last year, we opened F1 Arcade racing concepts in Boston and Washington, D.C. Moving forward, we plan on opening about four units this year and 5 – 6 units every year after that. Caesars Palace in Las Vegas, Philadelphia, Denver, and Atlanta are in the pipeline.
Marisa: As an investor, is there anything you’re specifically looking for to add to your portfolio?
Mathew: We will be making more investments in Fund 1, so we are looking for these two verticals: tech-enabled concepts in experiential entertainment and hospitality tech.
There is a lot out there. In the last 12 months, we’ve done due diligence on over 120 companies. We are focusing on finding the best and adding value.
Because of the network we’ve established over the years, much of our lead generation comes from operators and ambassadors introducing something that captures our attention. We have 50 CEOs and founders who continue to prove extreme value to our investments. We’re seeing a lot of growth being generated from our GP and LP affiliated companies.
With a focus on experiential entertainment and tech, it’s clear that the EMERGING Fund has found its niche in the most in-demand segments of the hospitality industry.
