Chipotle invests in self-driving startup Nuro as it prepares for delivery’s future

Restaurant chain Chipotle Mexican Grill (NYSE: CMG) announced it participated in a funding round for self-driving vehicle startup firm Nuro. The investment was made in November 2020, but Chipotle’s participation was just revealed by the company.

“We are always seeking opportunities that provide innovative solutions for increasing access and convenience for our guests,” said Curt Garner, Chipotle’s chief technology officer. “Nuro could change the traditional delivery model and we believe consumers are going to continue to seek options and additional access points for how and where they enjoy their food.”

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Nuro announced the $500 million Series C round of funding in early November. The round was led by funds and accounts advised by T. Rowe Price Associates, with participation from new investors including Fidelity Management & Research Co. LLC and Baillie Gifford. The round also includes existing investors such as SoftBank Vision Fund 1 and Greylock.

Founded in 2016, Nuro has raised more than $1 billion from investors. It had ramped up testing and consumer deliveries using its second-generation vehicle, R2, by the end of 2020. At the time, it was making paid deliveries to consumers in Houston, and test vehicles were also on the road in California.

Chipotle didn’t divulge the size of its investment, but it is noteworthy as the company scales up its digital operations. The company reported 174% year-over-year growth in digital business in 2020, with about half of those sales coming from delivery. The investment in Nuro is the first in a third-party technology under the leadership of Chairman and CEO Brian Niccol, who took over Chipotle in 2018.

“Nuro and Chipotle share the same commitment to improving everyday life through innovative products, whether it’s through responsibly sourced food or autonomous delivery vehicles,” said Dave Ferguson, Nuro co-founder and president. “With financial and strategic support from world-class companies like Chipotle, we can continue to advance our industry-leading autonomous technology, grow our team and expand our delivery service.”

Chipotle has been aggressive in future-proofing its business. The company recently announced an expansion in Canada and has moved quickly to create digital-only brands and innovative takeout options. On March 9, it said it had launched a handcrafted quesadilla as a digital-only menu item. The item is made in its “digital kitchen.” The first Chipotle Digital Kitchen opened in November in Highland Falls, New York. The prototype digital kitchens are open for pickup and delivery only.

Read: Nuro raises $500M Series C

“The Digital Kitchen incorporates innovative features that will complement our rapidly growing digital business, while delivering a convenient and frictionless experience for our guests,” said Garner. “With digital sales tripling year-over-year last quarter, consumers are demanding more digital access than ever before so we’re constantly exploring new ways to enhance the experience for our guests.”

Chipotle has also rolled out carside pickup at 29 restaurants.

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Chipotle invests in self-driving startup Nuro as it prepares for delivery’s future

Restaurant believes consumers will one day receive food orders via autonomous delivery

Read: Nuro raises $500M Series C

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Brian Straight