McDonald's to acquire AI-focused startup for over $300m

Muriel Colon
March 28, 2019

A company that amasses as much data as McDonald's will find no shortage of algorithmic avenues.

The fast-food chain is reportedly acquiring a Tel Aviv-based big data firm Dynamic Yield.

Dynamic Yield, an Israeli startup specializing in artificial intelligence (AI) personalization, will be purchased by McDonald's at a value of over USD300 million.

McDonald's tested Dynamic Yield's technology in the United States in 2018, and will more widely introduce it this year for drive-through menus once the deal closes.

It's digital Drive Thru menus will now display food based on the time of day, weather and current restaurant traffic. The acquisition allows McDonald's to tailor the items displayed on menu boards at drive-thru outlets to customers.

McDonald's plans to use the technology to create an even more personalised experience at its Drive Thrus. Our acquisition by McDonald's, one of the most iconic and beloved brands of our time, is truly an endorsement of that vision as they have chosen Dynamic Yield to help power personalization across their 37,000 restaurants in 120+ markets around the world.

In a video touting the technology, McDonald's CEO Steve Easterbrook likened what's to come to online shopping on sites like Amazon, Best Buy or "As you place your cursor over an item and click, it enters your shopping basket and automatically suggests other items that are associated with that".

The technology will be rolled out at McDonald's Drive-thru restaurants in the United States in 2019 and will be swiftly expanded into top global markets following. Dynamic Yield previously raised $83 million from investors including Naver Corporation and Bessemer Venture Partners.

Self-service kiosks at a McDonald's restaurant at Ontario and Clark streets in Chicago, Ill. on Wednesday, Aug. 8, 2018. Most importantly, investment in technology, whether through partnerships like Uber Eats to grow its delivery business or flat out acquisitions like Dynamic Yield to digitally optimize all points of the McDonald's experience. Remodeled restaurants saw sales lifts of 4 to 6 percent in worldwide markets, as Ozan told McKinsey in a January interview, but the sales have been slower to rise in the U.S. Dynamic Yield will also continue to serve their current, and attract future, clients.

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