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Startup profile: MarginEdge
- Founded by: Bo Davis, Brian Mills and Roy Phillips
- Year founded: 2015
- Headquarters: Arlington, VA
- Sector: SaaS, fintech
- Funding and valuation: $162 million raised to date. Valuation undisclosed.
- Key ecosystem partners: GoTab, Qu POS
An AI-powered restaurant operations platform raised $80 million to boost its products and reach more customers, a notable move — especially in the DMV region, where large investments typically go to national security and defense tech firms.
This blowout Series D brings MarginEdge’s total funding to approximately $162 million, and was possible through leaning on existing investors, cofounder and CEO Bo Davis said, during what has been called a “SaaSpocalypse.”
“We were very lucky to have investors that have deep enough pockets and the excitement and interest in what we’re doing,” Davis told Technical.ly. “They don’t do due diligence. They’re on our board. They know everything we’re doing.”
“We were very lucky to have investors that have deep enough pockets and the excitement and interest in what we’re doing.”
Bo Davis, MarginEdge
The raise, announced today, will go towards hiring in R&D and sales and marketing, per Davis. Founded in 2015, MarginEdge sells products tracking management and payment systems to help restaurants save money and time. Operators connect their accounting and point-of-service systems, and upload individual invoices to automate sales reports and keep tabs on food price increases, for example.
Vibe coding and AI agent adoption are making it easier for companies to build their own software products, so investments in these kinds of software-as-a-service firms are becoming less popular. Plus, early-stage cyber, AI and energy infrastructure companies have received most of the capital invested in the DC region recently, not those in hospitality tech.
MarginEdge’s round, a combination of debt and equity, was led by existing investors Schooner Capital out of Boston and Penco Capital in Singapore. Returning investors Osage Venture Partners and Derive Ventures also participated, alongside equity provider Western Alliance Bank.
Human in the loop
Since most restaurants use pen and paper for invoicing, a key part of the MarginEdge platform is scanning these physical papers to gather information.
Sometimes, the AI tools do not read handwriting accurately on the average 300,000 invoices per week across 12,000 restaurants including Cava and Maman. That’s why MarginEdge employs hundreds of people — to ensure that information is gathered accurately, per Davis.
MarginEdge has 900 staff members, with 300 in the US and 600 overseas primarily in India and Bangladesh. Davis said. Specific hiring plans thanks to the funding were not disclosed.
“We needed humans in the loop from the beginning,” Davis said, “to provide the level of quality we wanted.”
Prioritizing product development
Davis, who owned a dozen restaurants before launching MarginEdge 11 years ago, has implemented machine learning since the start, he said. AI systems becoming more sophisticated in recent years have allowed the company to evolve much quicker than before, he said.
MarginEdge is aiming to get at every aspect of restaurant operations, Davis said. That includes hardware — MarginEdge sells scales to measure inventory by weight, which automatically uploads to the company’s platform.
New product releases include an integration for restaurants to link the platform to chatbots like Claude and ChatGPT.
In the coming months, the company is releasing “Smart Prep,” a product to automate and guide workers how much food prep is needed per shift based on historical data from restaurant sales. The goal is to save chefs hours of manual counting every morning, reducing food waste and preventing mid-shift ingredient shortages, per Davis.
“We’ve got a ton of stuff coming that is all about trying to take these AI tools and put them in the day-to-day workflows of the restaurants,” Davis said, “and really improve the operations.”
MarginEdge uses AI to streamline restaurant operations (Courtesy)