1Huddle Doubles Down on Restaurant Talent Development with Investment from EMERGING Fund

The company has also doubled down on Newark.

News came in May that Newark-based 1Huddle, which was in the first cohort at the Newark Venture Partners accelerator in 2015, received an important investment from EMERGING Fund (Chicago) to scale in the restaurant sector.

While the numbers haven’t been released, 1Huddle founder and CEO Sam Caucci called this investment significant because EMERGING Fund is a new fund that invests in early-stage concepts and innovative technology companies in the restaurant industry. Restaurant workforce development is a key vertical in which 1Huddle is having great success.

1Huddle made its mark by gamifying workforce development using science-backed, quick-burst mobile games. Workers literally play games on their phones to learn the material their employers need them to learn. This is working out well on the restaurant industry’s front lines, with the high turnover and constant need for retooling workers. It is also working out for the post-COVID restaurant industry, which needs to develop a workforce that will grow with and stay with the industry brands, he said.

Caucci explained that prior to COVID 1Huddle was doing very well, “growing at a very aggressive rate, year over year. We were getting into a lot of different verticals. And we were building and improving the product. When COVID hit, it directly impacted us.”

He continued, “In moving to Newark and working in Newark and working alongside Don [Katz] and Audible and Newark Venture Partners, we’ve made a commitment to the majority of global and American workers that are left out of the equation when it comes to talent development. Frontline workers make up to 80 percent of the U.S. workforce. It is a large percentage in retail restaurant hospitality. These are workers that don’t have one job, they have two to three at a time. And when COVID hit, we were affected because they were affected.”

Sam Caucci and team accept the Beacon of Hope award from Covenant House | 1Huddle

Just prior to COVID, 1Huddle had raised its Series A, led by New York-based Tribeca Venture Partners. They also moved into new headquarters at 550 Broad Street in Newark.

The current funding series will be rounded out by several investors who are at this time completing the diligence stage, and 1Huddle will make an announcement on those investors in the near future.

Now, on the other side of COVID, “we have zeroed in even more on the restaurant hospitality frontline worker use case because we feel very passionately that this is an important and powerful solution for that category of worker. And we also have seen success there,” said Caucci.

“We have grown over the last 24 months 3.5 times in the hospitality restaurant category. And we just came off our biggest gameplay quarter ever in quarter one, across all metrics, whether that’s creating games or people playing games. We’re still living in a moment where, according to the recent jobs report, hospitality and leisure have the biggest shortage of workers, so we’re not even back to full strength. Leisure and hospitality is still down 349,000 workers, 2 percent of the total pre-pandemic workforce. So, in this stage of growth, we have really isolated product-market fit in this category.”

Caucci said that he was introduced to EMERGING Fund by current restaurant clients who love 1Huddle’s product and who also happen to be investors in EMERGING Fund. He explained that EMERGING Fund is more like a strategic investor. “They work and live and play inside the restaurant hospitality space.”

It’s a tough market right now for raising traditional venture capital, especially for a company with an enterprise product, said Caucci. “You must defend a lot of metrics in the last 24 months that sometimes were outside of your control. When we saw challenges raising from traditional venture, we wanted to go a little bit more strategic,” he added.

“I feel really good about the VCs we have around 1Huddle, whether it’s Tribeca Venture Partners or it’s Newark Venture Partners. But what we really wanted to add to the mix was some investors that have real domain experience in the restaurant hospitality category, because that’s where we’re going deep now. I couldn’t have wished for a better outcome than to get investors in this round that have real domain experience. We already have one, NRD Capital [Atlanta], that does have restaurant hospitality experience. So it’s about adding more folks to our board who can make sure that we’re making the right decisions and choices strategically as we grow.”

Caucci concluded by saying that, in his opinion, fundraising for most startups would continue to get more difficult. He said that other startups should strategically pursue VCs that “know your category and can provide domain experience, versus just finding an investor who only provides money on the balance sheet.”

He also wanted us to know about the company’s commitment to Newark. 1Huddle was recently honored as a Beacon of Hope by Covenant House in Newark at an event at the New Jersey Performing Arts Center (NJPAC). “It’s become part of our culture for our employees to make time to do things in the community. We’re proud to be where we are. And I tell founders all the time who either came through Newark Venture Partners or are looking for a new workplace that it’s such a great community, but you have to commit to it.

“Even in this funding round, we’ve made about three or four hires from Newark. [1Huddle has 16 employees, 15 of whom work daily at its Newark headquarters]. We’ve committed to hiring locally and investing in the community. And that’s not easy. It’s easy to say, but it’s harder to do, because when you hire a recruiter, they want you to hire people from who knows where, and they want everything to be remote. When we hire engineers, they want the same thing. And we just stay true to the value of where we’re going. Newark gave us a lot, and we’re going to build Newark first.”

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