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Byte Foods

3095 Kerner Blvd., Ste. S

San Rafael, CA 94901

www.bytefoods.co

415-747-1991

Founders: Megan and Lee Mokri

Founded: June 2015

Funding: $5.5 million

Employees: 40

Offering fresh, local, healthful food to employees, gym members and residents via high-tech vending machines that provide big data on user behavior and streamline restocking has propelled a San Rafael startup to have hundreds of kiosks and dozens of employees in the past year.

As the number of locations for its “smart” refrigerators expands, 1.5-year-old Byte Foods (bytefoods.co) plans to expand its headquarters and device-assembly center six-fold early next year and hire additional workers. Byte is aiming at the majority of companies that don’t offer employees fresh food in the office, according to co-founder and CEO Megan Mokri, 33.

“You either have to be the size to warrant the buildout of an onsite cafe or cafeteria, or you need to have pretty deep pockets for a catered-food program for employees,” she said. “Otherwise, you’re basically stuck with the usual packaged snacks from Costco [Wholesale] or, worst-case scenario, the old-time vending machine in your office.”

To be sure, workers have been getting more food options on the job in recent years. Depending on the employer and distributor, more healthful snacks and beverages are finding their way into those traditional vending machines. The rising popularity of food trucks is putting more into circulation through business districts. And the gig economy has brought forward Uber- and Lyft-like delivery services that have shortened the distance between workplace and eatery.

At first glance, Byte Foods’ glass-door cabinets look like refrigerated units you might find in a deli or store. However, the proprietary tech inside operates like the self-service supermarkets Amazon plans to open. A user swipes a payment card through the reader, and the door is unlocked. The system detects the radio-frequency identification (RFID) tag on any item removed then puts through a transaction for the total price.

Internet connectivity with the kiosks allows for Byte to adjust pricing dynamically, plan operations and mine user data.

“We know at any given time across our hundreds of fridges in market the current inventory of every fridge, how long every item has been on the shelf, transaction data and emails for 70 percent of users,” Mokri said. “All of that allows us to not only streamline on the back end, in terms of servicing and replenishing the fridges and delivering the best-quality food to our users, but also it gives us unprecedented access to marketing to these users, who are often in these offices 40 to 60 hours a week. These often become a main food source for employees at the companies that we serve.”

Products carried include beverages such as Marin Kombucha, Revive Kombucha of Petaluma and cartons of Oakland-based Blue Bottle Coffee mixes, such as a New Orleans-style blend with organic milk from Petaluma-based Clover Stornetta Farms. Food suppliers have included Marin’s Rustic Bakery, Oakland-based The Town Kitchen, which trains youth from low-income families in food service skills, and The Noble Spoon prepared foods by Santa Rosa’s Council on Aging.

Food that’s removed from Byte fridges but hasn’t passed expiration is donated to ExtraFood.org. The San Rafael-based organization has received about 9,000 meals so far from Byte for distribution to needy people.

Currently, several hundred Byte Foods fridges are placed from Petaluma south to San Jose and along the eastern shore of the San Francisco Bay. They’re mostly at workplaces but also in hospitals, gyms and apartment complexes. Typically, the service subscription is $500 a month, and organizations can opt to subsidize some or all the cost of the food.

Byte Foods

3095 Kerner Blvd., Ste. S

San Rafael, CA 94901

www.bytefoods.co

415-747-1991

Founders: Megan and Lee Mokri

Founded: June 2015

Funding: $5.5 million

Employees: 40

Byte serves tens of thousands of employees at organizations large and small. Those include Autodesk and BioMarin Pharmaceutical, both of San Rafael, other large Bay Area employers like CBS Interactive and Sephora, and round-the-clock operations such as the Tesla factory and Chevron refinery. Each fridge serves about 250 people, depending on how far away the location is from restaurants or stores.

Byte’s reach has grown dramatically this year, up from 50 installed fridges in May. That’s when Byte acquired Pantry, the San Francisco-based maker of the fridges, in an all-stock deal. Launched in 2012, Pantry had raised $2.3 million in seed capital and placed its units across the country.

Six months after Mokri and her 38-year-old husband, Lee, started Byte in June 2015, it became Pantry’s biggest customer. Now, the fridges and accompanying tech are assembled in San Rafael.

Byte has raised $5.5 million so far and employs 40, with 30 in San Rafael. The couple declined to get more specific on how well the company is doing financially.

The Mokris launched Byte as they were running 180Eats, a meal-delivery business they started a year earlier. It prepared health-conscious meals in a local commercial kitchen, eventually growing its customer base to nearly 2,000 Marin households served. After discovering the Pantry fridge and installing one at a 180Eats corporate partner, the Mokris realized which was the more lucrative business.

“It became clear the economics of this business, the need for it and uniqueness in the marketplace,” Megan Mokri said. So they sold assets of 180Eats in June to focus on Byte.

Late last month, Byte leased nearly 7,000 square feet of office space at 101 Glacier Point Road, about a mile away from its current base of operations at 3095 Kerner Blvd. The company plans to move its headquarters in February.

“It’s nice to have a growing tech company in Marin County,” said Trevor Buck, a Cushman & Wakefield agent who represented Byte in the lease deal. “We’re seeing more of this kind of thing. This is a great example of the new economy in Marin County.”

Byte also has a small distribution warehouse in San Rafael. Because many of the products are fresh, they’re moved onto delivery trucks within a day of when producers deliver them, guided by the company’s software algorithms, according to Mokri. Deliveries run three to seven times a week, but the company’s software predicts often within a month after fridge installation how best to plan restocking of certain items.

The company can extend its service area via “mobile warehouses,” which are refrigerated truck trailers from which products can be offloaded to delivery trucks to service accounts. Using such means, Byte could serve kiosks as far away as Sacramento, Mokri said. But in coming months, the company wants to start serving other parts of the Bay Area, pushing east to Walnut Creek, if the density of clients becomes high enough.

Before starting 180Eats, Megan Mokri worked for six years in online advertising and marketing for Yahoo and then Ghostery, and Lee Mokri worked in marketing and public relations agencies for about a decade.

Brian Foster and Steven Leonard of Cushman & Wakefield represented property owner Donald Tornberg in the recent San Rafael lease negotiations.