After a hot year in 2021, retail tech funding is now showing some signs of a cool off. The sector, which includes everything from contactless checkout to e-commerce marketplaces, brought in $23.8 billion in funding in Q1 2022, an 11% drop from the previous quarter (and down 6.6% YoY), per CBInsights.

• The decline aligns with trends among all venture funding, which saw the largest percentage QoQ dip (19%) since Q2 2012, the business analytics platform noted.

Money moves: “A fair amount of volatility” in the markets has made investors shift their focus to companies that are a bit more of a “sure thing,” CBInsights Senior Lead Analyst Laura Kennedy told Retail Brew.

• Though 55% of deals in the quarter were early-stage, the median size of mid- and late-stage investments is getting bigger, the latter growing by 11% to $100 million.

“When investors are really looking to double down, they’re looking at the mid-stage companies that are growing and that there’s proof of their growth, and they’re looking at the late-stage companies that can offer them scale and more stability,” she said.

Nearest exit: Retail exits largely consisted of M&A deals. There were 256 in the quarter, 91 of which were in e-commerce. Meanwhile, the number of companies that went public through IPOs and SPACs (11) was cut in half from the previous quarter (just when we finally memorized what a SPAC is).

Ones to watch: Nearly half of the new unicorns in Q1 were within supply chain and logistics (like French warehouse robotics company Exotec and Indian B2B e-comm platform ElasticRun), which Kennedy noted was “not shocking” given the tumultuous state of global supply chains.

Store-management tech was the only sector that saw a QoQ boost in funding, up 10% thanks to Relex Solutions’s $568 million deal in February. Meanwhile, e-comm got off to a slow start this year, with funding down 15% QoQ, though the space garnered plenty of sizable deals, like Fanatics’s $1.5 billion round.

• Kennedy noted the performance in these two sectors “emphasizes the need for the omnichannel solutions and omnichannel tech.”

“For all of the funding that goes into e-commerce…an increase in funding [for] in-store tech reminds us that for the vast majority of retailers and brands, stores still make up the vast majority of sales,” she said.—EC

DoorDash Kitchens, the company’s ghost-kitchen concept, is ramping up with a new location that calls itself a “delivery-forward food hall.”

What’s cooking? Alongside pickup and delivery, the Brooklyn location features a dining area—a first for the concept. DoorDash is also considering adding outdoor seating, Insider reported.

• The space features five restaurants to start, including sushi restaurant Domodomo and chicken-and-pie concept Pies ’n Thighs. Pizza chain Little Caesars, for one, will enter the kitchen later on.
• This marks the third DoorDash Kitchen location and first outside of California, where the two existing kitchens operate on a “rent-a-kitchen” model.

“We heard from our restaurant partners that being able to serve Brooklyn—some for the first time like Domodomo—is a helpful way to reach more customers and test a new location without committing to a brick and mortar,” Ruth Isenstadt, senior director of DoorDash Kitchens, told Nation’s Restaurant News.

Stepping up: As more shared- and ghost-kitchen startups like CloudKitchens and Kitchen United have expanded to include self-serve kiosks and lounge seating, it seems DoorDash wants to catch up.

• The ghost-kitchen market is projected to hit $71.4 billion by 2027, up from $43.1 billion in 2019, per Hospitality Technology.
• “There’s a shift in consumer dining habits in ready-to-eat meals, and one of the things consumers really liked was the ability to order across concepts. If I want Chinese and you want barbecue, we can get that on the same ticket with the same delivery driver,” Atul Sood, chief business officer for Kitchen United, told NRF.

According to Insider, DoorDash is also on track to reopen a previously tested pop-up ghost kitchen in San Jose, where the company’s employees cooked and sold items from multiple restaurants.—JS

Today’s top retail reads.

STOP: Brands are increasingly texting consumers. (Forbes)

When Trix are not for kids: How food brands are taking on “Double Stuf Stoneos” and other look-alike products that are infused with cannabis—and sometimes consumed by unsuspecting children. (Washington Post)

Slush life: Slurpee vs. Icee vs. Freezoni—a brain freeze-inducing exploration of slushies. “If you’ve ever been enthralled by one slushie and disappointed by another, it’s probably because you may be keying into qualities of which you’re not aware: carbonation, expansion, density, flavor intensity.” (The Atlantic)

Your retail road map: Target Accelerators programs offer unmatched mentorship and insights into supply chains, marketing, buyer communication, and so much more. Is your company ready to grow? Explore 3 Target Accelerators small-business success stories here.*

^{*This is sponsored advertising content.}

What happened in the world of retail this week in…1909 and beyond? Retail Brew takes you way, way, way back.

We have a confession to make: Last week, Time Machine accidentally jumped forward instead of back. Apologies to everyone in a trivia league. Knowing that a prototype of Ye’s Nike Air Yeezy 1 sneakers were sold by Sotheby’s for a record-breaking $1.8 million on April 26, 2021, probably doesn’t help you now. But these birthday facts might:

• On May 2, 1937, Ted Dabney, who co-founded Atari and created the video game Pong, was born in San Francisco.
• Also on May 2—but in 1955—fashion designer Donatella Versace was born in Reggio Calabria, Italy. One “amazing birthday present” she got this year? Going to the Met Gala with Cardi B.
• And on May 7, 1909, in his first of many developments  Edwin H. Land, inventor of the instant camera and co-founder of the Polaroid Corporation, was born in Bridgeport, Connecticut.

Catch up on the Retail Brew stories you may have missed.

• How Liz Hershfield is pioneering sustainability at Madewell and J.Crew
• Breaking down New Jersey’s upcoming single-use bag ban
• A roundup of April’s retail exec moves