Chipotle and Cava put rivalry on pause with $25 million bet on restaurant automation

Hyphen, a foodservice platform that automates culinary operations—including meal production at assembly stations—has raised $25 million in Series B funding led by Chipotle’s Cultivate Next venture fund, which invested $15 million, and Cava, which contributed $5 million with an additional $5 million commitment subject to terms.

“This new funding from two of the most iconic brands in the fast-casual industry is a testament to the impact Hyphen’s team and technology are having on restaurant operations,” said Stephen Klein, CEO and co-founder of Hyphen, in the announcement released Tuesday.

Chipotle is a previous investor in Hyphen, but this marks Cava’s first major investment in automation.

“I certainly see a lot of opportunity at Hyphen,” Cava CFO Tricia Tolivar told Fortune.

Cava’s co-founder and CEO Brett Schulman and the leadership team believe technology should enhance the human experience, not replace it, “and Hyphen’s equipment does just that,” Tolivar said. Cava has considered Hyphen and similar concepts for months and is confident this partnership is a wise move, she added.

“Chipotle is in the fast-casual space and sees this investment in a similar way, and we’re happy to be able to partner with them,” Tolivar said.

Chipotle specializes in Mexican-inspired dishes, featuring beans, rice, salsa, and guacamole, while Cava focuses on Mediterranean flavors such as hummus, tzatziki, feta, fresh vegetables, and grains. Both offer grilled meats and compete for brand loyalty among consumers who value fresh ingredients and customizable, build-your-own meals.

At Cava’s restaurants, Hyphen will be used for what Tolivar describes as the “second-make line”—an area in the back of the house where team members prepare all bowls and pitas for digital orders (delivery and pickup) separately from in-restaurant guests. Hyphen’s system will allow team members to prepare a bowl or pita on top, while automatically producing additional bowls on the bottom from the same ingredients, boosting speed and throughput, she explained. The technology also aims to improve digital order accuracy.

“Most importantly, it’s really about making our team members’ lives easier,” she added. Cava is still in the testing phase, so it will be a few months before the technology is deployed in restaurants, Tolivar said.

The company reported on Tuesday for its fiscal second quarter ended July 13 that Cava revenue grew 20.3% year over year to $278.2 million. About 37% of sales in the quarter were digital, Tolivar said. Second-quarter, same-restaurant sales grew 2.1%, while the company opened a net 16 new restaurants, bringing the total to 398—a 16.7% year-over-year increase.

As for Chipotle, in November, Scott Boatwright became the permanent CEO, following the departure of Brian Niccol, who is now the chief executive at Starbucks.