At the end of 2024, Houlihan Lokey, an investment banking and financial services company, published their Restaurant Technology Market Update. The report states, “Restaurant technology has continued to attract both strategic and private equity investment as operators increase technology spending to improve operational efficiency to combat margin compression.”
They expect this market to continue gaining momentum as operators use it to maximize revenue, create enhanced guest experiences, and grow customer loyalty.
Here, we’ll uncover their findings, including the notable M&A activity and the opportunity for tech adoption. Whether you’re an investor, a technology wizard, or a restaurant looking to take advantage of the changing landscape, this information will lead the way.
Strategic Consolidations
A few years ago, we began to see the headlines “Technology Consolidation Continues to Increase” and “M&A Activity Speeds Up in the Tech Sector.”
Why?
Whether a merger of equals or a controlling acquisition, this action can improve economies of scale and gain a larger market share. It may also improve tax and operational efficiency. As these M&As continue to dot the technology landscape, you can expect a shift towards larger firms dominating the field.
Some of the M&As Houlihan Lokey highlighted include:
- Paytronix and Access
- Tock and American Express
- Revel Systems and Shift4
- Cuboh and ChowNow
Notable financing activity included Buyers Edge Platform’s $425M preferred equity investment led by General Atlantic Credit’s Atlantic Park Fund, along with Blackstone Tactical Opportunities and Morgan Stanley Tactical Value. Buyer’s Edge Platform is an industry leader in digital procurement solutions. Since 2019, they have integrated 21 acquisitions.
An early division of Buyers Edge is Consolidated Concepts, the supply chain division co-founded by Mathew Focht and John Davie.
Additional financing activity includes lead investors Hillhouse Investment Management and Besemer Venture Partners investing $48M in Dinii, a software company focused on cloud-based services for restaurants.
What’s Driving Restaurant Tech
Houlihan Lokey suggests the dynamics driving tech investments in the restaurant industry. “Investor interest is growing in the restaurant technology sector, driven by strong top-line growth, increasing adoption of operational solutions, and consumer lifestyle changes.”
The market continues to expand, with an expected sustained 16.5% CAGR from 2024 through 2033. Due to the challenges restaurants face, including rising food costs and inflation, more operators are adopting technology to control costs.
The increasing demand and rapid advancements in technology have resulted in fragmentation. This division has created an environment ripe for consolidation and end-to-end solutions.
One example is ChowNow’s acquisition of Cuboh in 2024, an integration system for POS systems, third-party delivery apps, and online orders. By consolidating multiple online ordering platforms, restaurants only need one tablet for all their delivery apps.
The same year, American Express acquired Tock for $400 million. By acquiring this reservation and event management platform, American Express can expand its offerings, making more dining experiences and restaurants available.
Supporting Change
The James Beard Foundation, along with Deloitte, recently released their 2025 Independent Restaurant Industry Report. This report came from a 2024 survey of more than 400 restaurant owners and operators across 47 states in sectors that include fine dining to fast casual.
The greatest challenges operators face include rising costs associated with labor, operations, and food. This tightening prompted 55% of respondents to increase menu prices on all items, while 36% increased prices on a few items.
Changing restaurant menus at the right time and in the right way is one of the ways technologies are supporting the changing landscape. Today’s technology streamlines the process, from recipe costing to menu pricing, ordering, inventory, and reducing waste.
Today’s restaurants leverage the latest innovative technologies to maximize quality and remain competitive. Our industry has always been about innovation, and this drive continues today.
At EMERGING Fund, we invest in early-stage startups and support restaurant tech companies by leveraging pre-existing working relationships and influential industry insiders. We are at the forefront of technology-driven transformation in the restaurant and entertainment sector.
For investment, partnership, or general inquiries, contact EMERGING.
