Just two years ago, McDonald’s acquired Israeli startup Dynamic Yield for a reported $300 million. The American fast-food giant wanted to leverage the startup’s AI technologies to improve service and profitability at locations with a McDrive. However, now McDonald’s is looking to sell part of its Dynamic Yield operations.
Automating menus based on weather and time
Dynamic Yield’s product customizes the eCommerce experience for end customers, covering all selling point channels (app, web, mobile, mail). To make this happen, the system collects user data, which is combined with data from the retailer’s CRM and external data markets like BlueKai (now Oracle DMP). After segmenting the customers, the platform automatically generates recommendation engines to promote products and content. For example, the system has been used to push “impulsive” decision-making messages, which may sound familiar from sites like Booking.com (“Just 3 days left on this price”). Additionally, Dynamic’s platform customizes push notifications per customer on different sales, as well as adapting landing pages to fit the shopper, and more.
McDonald’s utilized the Israeli startup’s system to make personalized adjustments to the McDrive menus, register points, and food-to-vehicle service. This way, Dynamic Yield’s system can automatically adjust the menu according to the time of day, and offer coffee in the morning; or change the menu to fit the weather - On hot summer days, the system will recommend cold ice-cream; in addition to other recommendations from the menu that have been displayed after trending among other users.
Focusing on the patties
McDonald’s acquired Dynamic Yield’s entire operations, including access to more than 300 global customers already using Dynamic’s technology, naming companies like IKEA and Lacoste, among others. Since the acquisition, the company has continued to operate as an “independent” startup inside the McDonald’s ecosystem. Now, McDonald’s is looking to go back to its basics, and focus on its core product. This leaves all unrelated operations in the mud, with the fast-food giant looking to auction off all technologies that aren’t focused on the McDonald’s brand.
McDonald’s didn’t add a price tag or an expiration date to this sale, but it’s not inconceivable to think that now that Dynamic is back on the shelf, another smart customer will come along sooner rather than later. Among the potential suitors, we could see sales-oriented cloud companies like Salesforce, which could implement the tech throughout its product offering; Although the company is mature with a strong and steady customer base, leaving the door open for private equity funds to swoop in for the acquisition - they would want to improve the company and sell it for profit.
Dynamic Field was founded by Omri Mendellevich and CEO and Liad Agmon, who explained that the idea of selling non-McDonald’s related operations isn’t new and was already discussed at the start of the companies’ shared path: “Now seems like the right time to look into this option.”