Restaurant payments app Sunday cuts staff, exits 60% of its markets

Dive Brief:

Sunday, a QR code restaurant payments app, is exiting 60% of its markets and laying off an undisclosed number of global employees, Sifted first reported last week. This restructuring comes just 16 months after Sunday’s launch, and one month after the company entered Italy and Portugal, according to Sifted. Sunday didn’t respond to a request for comment before press time.
The company will shutter operations in Italy, Spain, Canada and Portugal. It will instead focus on its most important, and only remaining, markets: the U.S., U.K. and France. Sunday works with over 4,000 restaurants in the three regions, Sifted reports.
These layoffs are the latest in a string of job cuts at restaurant technology companies. Earlier this week, virtual restaurant platform Nextbite also announced it was trimming its workforce for the second time this year.

Dive Insight:

Sunday attributes the layoffs and restructuring to investor pressure around profitability, Sifted reports.

The company has grown quickly since its debut in spring of 2021, securing $24 million in seed round funding and $100 million from its Series A funding led by Coatue with participation from DST Global in less than a year. Sunday’s value proposition met the needs of pandemic-era diners and restaurants, allowing customers to browse an operator’s menu on their mobile device and pay for their meal through a QR code for a contactless experience.

The restaurant payments market is crowded with competitors. Toast went public last fall, raising over $870 million on the first day of its IPO, and accelerated its order and pay and digital ordering capabilities. The rival restaurant tech has also bolstered its non-payments offerings, most recently by acquiring Sling, a restaurant employee scheduling and management platform, last week. The deal is meant to support Toast’s Payroll and Team Management Suite, which includes Toast Payroll, Toast Tips Manager and Toast Pay Card & PayOut.

Sunday has also moved toward diversifying its offerings, perhaps in a bid to stretch beyond COVID-19 era use cases as diners become more comfortable with traditional on-premise experiences and potentially less reliant on QR codes. The company added QR code ordering (it initially offered only payments) to its platform in March. In 2021, the company said it planned to develop a loyalty program, Business Insider reports.

One thing is clear: fast-growing, digitally focused food platforms are beginning to run into stumbling blocks. Reef Technology, a ghost kitchen company backed by Softbank, cut 5% of its workforce in May. And this week, delivery startup Gopuff announced it is trimming 10% of its global workforce and closing dozens of its distribution centers.