Finance platform InKind has raised more than $1 billion in the past six months to invest in an industry many traditional lenders have long considered too risky: independent restaurants.
Today, InKind announced $414 million in financing in a round led by Citi. The latest funding comes just one month after InKind secured $320 million from Liberty Mutual Investments and six months after announcing a $450 million round of debt and equity funding led by Magnetar, an Illinois-based investment firm.
To InKind founder and CEO Johann Moonesinghe, also a restaurateur, the institutional funding is validation of the company’s nontraditional financing bet.
“Restaurants need a model that recognizes their core economic capability: creating exceptional experiences for guests,” he says. “We invented a better way to finance business. Now we have backing from one of the biggest global banks.”
InKind’s novel financing model offers restaurants capital without taking an equity stake in them or charging interest. Instead, InKind buys restaurant dining credit, usually at a 2-to-1 ratio.
For example, a restaurant receiving a $500,000 lump-sum investment gives InKind $1 million in credit. InKind sells the credit to diners at a discount (for say, $750,000) and diners can redeem it through the InKind app. Instead of a traditional arrangement where a restaurant repays a portion of profits, it “repays” InKind’s investment by honoring the credits over time.
InKind plans to use its new capital to increase its footprint—and influence. Already, it’s doled out more than $600 million to some 77,000 restaurants. Over the next year, it wants to back an additional 10,000 businesses with more than $1 billion.
Turning restaurants into an asset class
InKind’s model is catching on. In July, the platform distributed $60 million to restaurants. In the same month, it signed 1,000 new businesses to its platform, a milestone that first took the company seven years to achieve.
InKind now works with 8,500 restaurants across the country, from single-location neighborhood spots to large restaurant groups such as Ethan Stowell Restaurants and José Andrés Group. Its app has 5 million users, up from 1 million in March 2024. The company has at least doubled revenue every year for the past seven years; it’s been profitable for the last two.
That scale proves the value of restaurants as an asset class, Moonesinghe says.
“Citi and Liberty Mutual are not evaluating a single independent restaurant in isolation,” he says. “They are financing a curated platform operating across thousands of restaurants and millions of guests, supported by years of performance and transaction data. That gives them a diversified, data-rich way to participate in the restaurant economy.”
Though it intends to work with thousands of additional restaurants, InKind chooses its partners carefully. The company’s performance is tied to the success of the restaurants it funds. If one closes, or just isn’t popular enough, InKind will lose money on credit it can’t sell.
Comprehensive data on U.S. restaurant closures is hard to come by. One stat, broadly circulated for at least a decade, says as many as 3 in 10 restaurants close within their first year. The true number is probably lower—data from the Bureau of Labor Statistics that tracks openings and closures in the combined category of “accommodation and food service” suggests the one-year closure rate is closer to 15%.
Just under 3% of the restaurants InKind has backed since 2015 have closed. Some of that success could be attributable to the funding itself—by its nature, InKind helps prevent failure—but the company also developed a fast and effective scoring process to evaluate potential partners.
Funding restaurants, small and large
Since 2023, InKind has used an internal AI tool, dubbed Sherlock, to vet restaurants, determining how much funding they can responsibly receive and the length of the credit term, generally between 12 and 48 months.
And while Sherlock takes a ton of restaurant- and industry-specific data into account, if the business doesn’t pass muster, it’ll get the same response it would’ve gotten from a traditional lender: “If they don’t qualify, we don’t fund them at all,” Moonesinghe says.
There’s no one quality that makes a restaurant fund-worthy; InKind works with many types of restaurants, fine dining to fast casual. It’s written onetime checks for as little as $5,000 and as high as $12.5 million. It’s given one restaurant group $30 million to date, committing another $30 million in future funds. Nearly all of its restaurants (96%) request additional capital.
The approval process works quickly, and restaurants use the funding as they see fit. Some have used it to repay traditional investors, preferring to take on the “debt” of dining credit rather than pay interest on a loan or offer equity in their companies.
Restaurants have used the money to cover slowdowns, build outdoor patios, open new locations, or simply pay the bills. (One Nashville operator used it to bridge the days after an unexpected snowstorm.)
Restaurants have faced increased costs for years; a July analysis from the National Restaurant Association determined that total restaurant expenses, including food costs, labor costs, utility costs, and more, are up 36% since 2019.
Rewarding diners
In addition to all the cash, InKind promises restaurants more customers. It hooks diners, who buy and use restaurant credits through its app, with the promise of a deal: Download the app, and you get $25 toward a $50 spend through the app. (InKind even sells credits at Costco.) Diners also get cash back to apply to future meals for paying through the app.
Diners can find restaurants on the app by searching through listings or via a map feature. InKind, meanwhile, works behind the scenes to control supply and demand. During slow times, it’ll raise its cash-back offering from 20% to 25%. InKind can also hide a listing if a restaurant gets too popular. (If too many guests pay with InKind credits at once, the business could find itself in a cash crunch.)
“We don’t love that as a consumer experience, but right now we have so many consumers, we’re having to do that,” Moonesinghe admits.
Given InKind’s skyrocketing popularity, significant funding, and huge spending plans for the year ahead, it’ll need a strategy for all that demand. By the end of 2026, the company aims to sign up 2,000 restaurants per month, doubling its current cadence.
Moonesinghe wants to expand InKind outside the U.S. He took my call from Rwanda after traveling across several continents with his husband, Andrew Harris, an InKind cofounder. It’s part honeymoon, part research trip; Moonesinghe realized an immediate financing need for restaurants in developing countries.
“[Harris] and I were lucky enough to be able to use our own money to build the business,” he says. “People didn’t want to lend us money to fund restaurants in the way that we fund them because it’s such an unproven asset.”
Nearly 12 years later, Moonesinghe believes InKind has proven the restaurant industry’s value to investors. The Citi-led investment, which took 18 months to close, seals the deal.
“We’re not capital constrained at all,” he says. “We’ll be able to fund all the restaurants that we want.”
