InKind Secures $414 Million Led by Citi for Restaurant Financing

Finance platform InKind announced on March 18, 2024, that it has secured $414 million in a funding round led by Citi, bringing its total raised in the past six months to over $1 billion. This latest financing aims to support independent restaurants, an industry often deemed too risky by traditional lenders. The funding round follows InKind's acquisition of $320 million from Liberty Mutual Investments just one month prior and a $450 million debt and equity funding round announced six months ago, which was led by Magnetar, an investment firm based in Illinois.

InKind founder and CEO Johann Moonesinghe, who is also a restaurateur, views this institutional backing as a validation of the company's unconventional approach to financing. InKind's model provides capital to restaurants without requiring an equity stake or charging interest. Instead, the platform purchases restaurant dining credit at a typical 2-to-1 ratio. For instance, a restaurant receiving a $500,000 investment from InKind would grant the company $1 million in dining credit. InKind then offers this credit to consumers at a discounted price, for example, $750,000, which diners can redeem through the InKind mobile application. The repayment mechanism for the restaurant involves honoring these credits over time, rather than a traditional profit-sharing or loan repayment structure. This innovative method allows restaurants to access funds by leveraging their core capability of providing customer experiences.

With this substantial new capital, InKind intends to expand its operational reach and influence within the restaurant sector. To date, the platform has already distributed over $600 million to approximately 77,000 restaurants. The company has set an ambitious goal for the upcoming year, aiming to support an additional 10,000 businesses with over $1 billion in funding. This expansion is part of InKind's strategy to transform restaurants into a recognized asset class within the financial market.

InKind's unique financing model is gaining traction, evidenced by its recent performance metrics. In July, the platform facilitated the distribution of $60 million to restaurants. During the same month, InKind onboarded 1,000 new businesses onto its platform, a significant milestone that previously took the company seven years to achieve. Currently, InKind collaborates with 8,500 restaurants, demonstrating a growing adoption of its alternative financing solutions.