Exclusive: InKind lands $414 million led by Citi to dominate how independent restaurants raise money

Finance platform InKind has secured $414 million in new funding, led by investment bank Citi, in order to expand its innovative approach to financing independent restaurants. This comes just a month after InKind received $320 million from Liberty Mutual Investments and six months after announcing a $450 million debt and equity financing round led by investment firm Magnetar.

InKind founder and CEO Johann Moonesinghe, a former restaurateur, believes the funding validates the company's novel financing model for the highly risky restaurant industry.

Instead of traditional lending methods, InKind offers capital by purchasing dining credit from restaurants, usually at a 2-to-1 ratio. For example, a restaurant receiving a $500,000 lump-sum investment from InKind gives $1 million in credit. InKind then sells this credit to diners at a discount for $750,000, which diners can redeem through the InKind app.

The company plans to use its new capital to further its reach, with the goal of backing over 10,000 restaurants and investing more than $1 billion over the next year. InKind has already funded more than $600 million to more than 8,500 restaurants. The platform's unique model allows restaurants to avoid taking on equity and only "repay" InKind's investment by honoring the dining credits over time.

Moonesinghe notes that traditional lenders are evaluating individual restaurants, whereas Citi and Liberty Mutual are financing a diversified platform operating across thousands of restaurants and millions of guests. He believes this diversified, data-rich approach is proving the value of restaurants as an asset class. Despite the company's rapid growth and profitability, InKind remains selective in its partnerships.

While approximately 3 in 10 restaurants close within their first year, InKind has only lost money on 2% of the restaurants it has funded since 2015.