U.S. Markets closed

McDonald's Personalizes Drive-Thru Menu by Buying Tech Startup Dynamic Yield

- By Sydnee Gatewood

Accelerating its entrance into the digital age, McDonald's Corp. (MCD) announced on Monday it is acquiring New York-based artificial intelligence startup Dynamic Yield Ltd.

Valued at more than $300 million, CNBC reported the deal is the Chicago-based fast-food giant's largest in two decades.


It is also part of McDonald's latest initiative to incorporate more technology in its stores. The company plans to invest nearly $1 billion to upgrade approximately 2,000 U.S. locations with self-serve kiosks and digital menu boards in 2019. The addition of Dynamic Yield's technology will allow the restaurant chain's drive-thru menus to change based on factors like the time of day, weather, current restaurant traffic and popular items.

After testing the technology in several of its restaurants last year, McDonald's President and CEO Steve Easterbrook said its nationwide integration will improve the customer experience by "providing greater convenience on their terms."

"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," he added.

Once the acquisition is finalized, the company plans to first roll out the technology in all U.S. stores before expanding to international locations.

Following the close of the deal, Dynamic Yield will operate as a standalone company and continue to work with its current clients.

With a $473.88 billion market cap, shares of McDonald's were up 1.23% at $188 on Tuesday morning. After gaining 3% in 2018, GuruFocus estimates the stock has risen another 6% so far this year.

875106651.png

With a weight of 38%, McDonald's leads in the restaurant sector, according to the GuruFocus industry overview page. It is followed by Starbucks Corp. (SBUX), Yum Brands Inc. (YUM), Chipotle Mexican Grill Inc. (CMG), Yum China Holdings Inc. (YUMC), Darden Restaurants Inc. (DRI) and several other companies.

Disclosure: No positions.

Read more here:


This article first appeared on GuruFocus.