Arc raises $10.76M to bring AI back to the drive-thru
What's the deal? Arc, a voice AI startup founded by SquareDealroom has a profile for this one. Try Dealroom → and Cash AppDealroom has a profile for this one. Try Dealroom → veterans Mike MacLennan and Ali Hussain, has raised $10.76 million in seed funding led by Andreessen Horowitz. The company builds AI systems that take drive-thru orders autonomously, and says it is already working with two major fast-food chains, each with hundreds of locations.
Arc claims its system can complete orders on its own more than 95% of the time while lifting average order value by 4% to 5% through smarter upselling.
Why now? The drive-thru is one of the hardest environments for voice AI — noisy, rushed, full of accents and mid-order changes. The last wave of experiments didn't go well: McDonald's ended its IBM automated ordering pilot in 2024 after running it in more than 100 restaurants, citing reliability issues that went viral.
Arc argues that newer models, trained on real drive-thru conversations and tuned for brand-specific menus and accents, can finally clear the reliability bar. It also lets operators test different model variants in real time, measuring speed, accuracy, and ticket size — turning the lane into something closer to an e-commerce funnel.
What could go wrong? The fundamental challenge hasn't changed: a bad order slows the line, frustrates the customer, and pulls a human worker back into the process. A 95% autonomous completion rate still means roughly one in 20 orders needs intervention — and in a high-volume drive-thru, that adds up fast.
Consumer trust is another hurdle. After McDonald's high-profile stumble, restaurant operators may need convincing that this generation of AI won't create the same viral embarrassments.
The signal: Andreessen Horowitz leading a seed round for a voice AI startup targeting drive-thrus suggests the firm sees the failed first wave as a timing problem, not a market problem. Arc's founding team — drawn from Cash App, a late-growth fintech that built its brand on simplifying high-frequency transactions — hints at how the company thinks about the lane: less as a restaurant problem and more as a payments-and-conversion challenge ripe for optimisation.
Read more: startupfortune.com
