McDonald’s Shifts Its Top Priority from Big Mac, Announces Its Largest Tech Acquisition
McDonald’s is going to acquire Israel’s Dynamic Yield to apply its algorithmically driven decision logic technology to its drive-thru menus.
By Julia SakovichUpdated
3 mins readPhoto: Dynamic Yield / Twitter
While McDonald’s always has been strongly associated with fast food, given the today’s activities of the company, who knows, maybe one day you would more likely think about Big Data when somebody mentions the company’s name rather than Big Mac. And it’s not a joke.
Tech Acquisition
As it has become recently known McDonald’s is going to acquire a tech company which is to become its largest deal in 20 years purchase since it acquired Boston Market in 1999.
It has already reached an agreement with Tel Aviv-based startup Dynamic Yield that offers retailers an algorithmically driven “decision logic” technology. To understand better what this technology represents itself, just think about online shopping. When you add a product to your online cart, the e-commerce service notifies you about some other items that other customers purchased together with the one that you’ve chosen.
According to the information provided by people familiar with the matter, McDonald’s is going to pay over $300 million for the startup.
Though this amount looks rather impressive, the fast food giant is definitely one of the companies that can afford such expenses. For example, in 2018 its net income accounted for nearly $6 billion and at the end of the year, its free cash flow was approximately $4.2 billion.
Every day nearly 68 million clients visit McDonald’s but the majority of them prefer to place and pick up their orders at the drive-thru window. That’s why McDonald’s has taken a decision to modernize this type of its services first of all.
Tech Modernization
The technology provided by Dynamic Yield will enable McDonald’s to ensure digital drive-thru menus that will be changed based on different factors including the weather and current restaurant traffic.
Last year, the company tested the drive-thru technology in some of its U.S. restaurants. And there are plans to launch this technology in other U.S. locations this year. Moreover, the company is going to make these new opportunities available in its other location outside the U.S.
McDonald’s CEO Steve Easterbrook commented on their new deal the following way:
“With this acquisition, we’re expanding both our ability to increase the role technology and data will play in our future and the speed with which we’ll be able to implement our vision of creating more personalized experiences for our customers.”
But it’s not the only innovation that McDonald’s is currently interested in. It is planning to spend nearly $1 billion to modernize over 2,000 its restaurants in the U.S. The company is going to add self-serve kiosks and digital menu boards which will ensure higher sales volumes owing to an increased level of convenience for customers.
As for the fortune of Dynamic Yield, when the deal closes, it is said to remain a stand-alone firm and it will continue its work with clients other than its sole owner.
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