inKind: A new way to fund your restaurant growth

Accessing capital does not have to require paying back lenders, splitting profits with investors, or pledging your assets.  inKind has developed a two-sided marketplace that provides restaurants with debt-free capital and drives more guest visits.  inKind provides restaurants with upfront capital by purchasing food and beverage credit in bulk – essentially a large gift card.  inKind uses the credit to drive guest traffic to restaurants through digital marketing and the inKind app.  The credit is redeemed by guests over 24 months so the operator can get capital without disrupting cash flow.  Operators receive capital that is non-restrictive and debt-free – you never have to pay inKind back.  Consumers on the inKind app receive incentives to discover, dine and spend more at your restaurant.  

How much capital does inKind offer?  inKind partners with single-unit independent operators up to large enterprise groups.  Upfront funding ranges from $50,000 up to $10+ million for larger groups. inKind funds restaurants in two rounds.  The initial funding round is to $5,000 per unit for fast-service restaurants and $10,000 per unit for full-service restaurants.  Based on how much credit guests redeem in the initial 30-60 days, the restaurant will qualify for a full funding, which is a larger amount than the initial funding and is paced to last for 24 months.

inKind purchases food & beverage credit at a 2:1 credit-to-capital ratio.  The surplus credit is used to incentivize guests to dine and spend more at your restaurant.  For example, inKind would provide $100,000 in capital in exchange for $200,000 in food and beverage credit.  The operator receives $100,000 in cash that is debt-free and non-restrictive.  inKind receives a $200,000 gift-card to the restaurant which it monetizes by driving guest traffic to the restaurant over a 24-month period.  Everytime a guest pays with the inKind app, it deducts from the $200,000 credit balance.  After 24 months, the balance is close to zero and the restaurant can engage in a new round of funding.  To protect a restaurant’s cash flow, inKind guest redemptions only account for 2-4% of a restaurant’s daily revenue.

inKind’s funding results in a negative cost of capital for restaurants.  When inKind sends a guest to a restaurant, there are no additional fees to serve the guest, only the variable costs of food and beverage.  Therefore, the cost of inKind’s capital is equivalent to the restaurant’s cost of goods – typically around 30% of net revenue.  Using the example of $100,000 in capital for $200,000 in food & beverage credit, the cost of capital is 30% of $200,000, or approximately $70,000.  As an operator, you’d receive $100,000 in upfront capital and it would cost you $70,000 in food costs to service the F&B credit over 24 months.  

On the consumer side, inKind uses the purchased credit to drive incremental guest traffic.  Guests on the inKind app receive “bonus credit” which incentivizes higher conversion and higher spend.  For example, assume your per person check average is $50. inKind will offer guests an incentive of $25 off a bill of $75+. Guests are incentivized to choose your restaurant over your competitors, and increase your per person check average.  If you are only looking to fill tables during off-peak hours, inKind can offer promotions that are only redeemable Monday through Thursday, for example.  

Hear from inKind restaurant partners: