Investment firms Emerging and Promethean have launched a $300m (£226m) experience fund to invest in artificial intelligence and automation companies serving the hospitality and experiential entertainment sectors.
The Experience Fund (XPR), which is being backed equally by both firms, will focus on businesses seeking to develop AI, data infrastructure and intellectual property for industries including restaurants, food service and gaming.
The fund has been launched with $300m (£226m) in committed capital and has a hard cap of $500m (£370m), aiming to invest in technologies designed to improve efficiency across hospitality businesses. It will be led by Matthew Focht, managing partner of Emerging and Michael Burt, managing partner of Promethean.
The areas of investment will include order and beverage automation, computer vision, autonomous service and labour and supply-chain intelligence.
The companies said portfolio businesses would also benefit from access to Buyers Edge Platform, which works with almost one in three restaurants across the US.
According to the companies, the US restaurant and food service industry employs around 15.7 million people, an estimated 10% of the workforce. The sector also experiences employee turnover of between 35% and 40% while operating on relatively low profit margins.
The fund builds on a six-year relationship between the two firms and will combine Emerging’s operational expertise with Promethean’s experience in institutional private equity investing.
Focht said: “Hospitality has enormous scale and very little legacy technology to defend, which is a rare combination. The winners won’t be the flashiest consumer app. They’ll be the AI platforms that take cost, labor friction and guesswork out of every location – and we can see which ones actually work, because we see the operating data across roughly a third of US restaurants.”
Burt said: “Technology is now transforming entertainment the way it already transformed music, film and television. We’re investing in the infrastructure that drives physical entertainment. The businesses that we are investing in are delivering a technology-driven experience as well as the B2B infrastructure that helps deliver the best in-person experience for the consumers.”
