How to offer the best embedded finance solutions: A roadmap for food delivery platforms

Online food delivery is growing at a rapid pace, with revenue in the sector projected to reach US$40.64bn in 2023 as consumers embrace the convenience and flexibility of online platforms. As the market evolves, food delivery platforms will need to adapt their approach to stand out. One of the most promising options is offering embedded finance solutions to merchants, creating new value-add potential, distinguishing service and supporting businesses through market volatility. 

Embedded finance builds on the existing relationships, routes to market and business models that drive growth for food delivery platforms, expanding the scope of value they can provide to their merchants to help both parties succeed. However, making the most of this new service will require the right technology, strategy and partnerships. 

YouLend has worked with leading food delivery platforms to offer embedded finance solutions including JustEat. Here we explore the roadmap for offering the best embedded finance solutions.

Download the guide: Embedded finance for food delivery platforms -> A new opportunity

Why do restaurants need embedded finance solutions

The move to online delivery has been a game changer for restaurants, enabling rapid growth, new business models and more efficient service delivery. But this shift also brings new challenges, alongside the existing issues that have long plagued the industry, including:

• Operations: As more restaurants move to food delivery platforms, increased demand puts significant pressure on their ability to manage cash, inventory, and day-to-day operations.
• Cash flow: The restaurant industry is particularly susceptible to economic conditions, including consumers cutting discretionary spending, changes in minimum wage and seasonality. 
• Staffing: Many parts of the hospitality are still struggling to attract and retain staff, with vacancies in the industry sitting at 11%.
• Overheads issues: SME restaurant partners are grappling with rising utilities, supply chain issues, and raw material price hikes. Their reliance on delivery platforms is up, therefore, they need to be operationally nimble to keep up with these economic challenges.

What are the benefits of embedded finance solutions for food delivery platforms?

Embedded finance solutions create a win-win for food delivery platforms, enhancing their level of merchant service with products that make a tangible impact to business’s success and survival rates, as well as offering new revenue streams for platforms that can distinguish their market positioning. 

In our work with leading platform businesses, we have seen:

• 6% increase in merchant LTV by 6%: Platforms can increase the life-time value of merchants with revenue-based repayments
• Improve merchant GMV by 26%: Platforms can improve Gross Merchandise Value with value-added products offerings
• Boost merchant core sales by 36%: Platforms can increase their merchants’ sales with fast business funding

How to implement embedded finance on your food delivery platform

While it is possible to simply use in-house resources to build your own embedded finance solution, an external partner or white-label provider can provide a faster route to market and reduce risk. 

Wondering whether to buy or build your embedded finance solution?
Check out our in-depth whitepaper.

When assessing partners, it’s important to ensure they match the needs of your business model, your customers and the pain points you’re trying to solve. Working with the right embedded finance provider can offer:

• Reliable service: Choosing a tried and tested technology partner ensures you can offer the service your customers need from day one, particularly when it comes to a quick application and decision process, providing flexibility and security for merchants.
• Reduced implementation risk: Specialist providers can help manage the scoping, technology, and implementation process to ensure that the process is completed on time and on budget, with all necessary functionality and safeguards. 
• Specialist compliance expertise: Financial services require additional compliance considerations for data security, underwriting and consumer information – falling behind on these can lead to steep penalties from regulators. Working with a partner helps platforms address specific requirements to reduce risk and accelerate implementation. 
• Scaling support: Working with an experienced technology partner ensures that embedded finance systems are ready to scale with your business, delivering a consistent customer experience for every user as your platform grows.

Implementing embedded finance solutions with YouLend

YouLend is the embedded finance solution partner for leading platform businesses, including food delivery businesses such as JustEat and Foodhub. These businesses rely on our embedded finance platform to help them adapt faster, tailor their customer experiences and reduce risk when it comes to offering embedded finance services, including: 

• Rapid time to market: YouLend helps platforms go live with embedded financial services via hosted financing pages in just 7 days.
• Customer-focused fees: YouLend works with multiple capital sources to offer the most competitive pricing for merchants while offering higher levels of commission for platforms on all financing provided, with payments managed as a portion of revenue. 
• Limited development required: YouLend’s no-code platform works with a single API connection, fully white-labelled with no development resource required.

To learn more about how to start offering embedded finance solutions on your food delivery platform, book a demo or read our partner case studies here.