After less than three years, McDonalds sells one of its biggest acquisitions to date

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When McDonalds bought an Israeli artificial intelligence startup in 2019, some puzzled analysts wondered how exactly this was going to put more Big Macs on the table.

On Tuesday, less than three years after the experiment began, McDonalds announced that it had agreed to sell the unit, Dynamic Yield, to Mastercard. However, he will still keep his teeth in the AI ​​game.

McCchickening outside

McDonald’s bought Dynamic Yield for more than $ 300 million, making it the company’s largest acquisition in decades. The AI ​​unit’s personalization and decision logic technology – which guides customers through shopping and suggests things they might want in order to maximize sales – has been applied to drive-thru locations. , ordering kiosks and mobile apps under $ 1 billion in 2019 upgrades.

Some franchises initially withstood the surge in tech spending, which was in part subsidized by McDondald’s Chicago headquarters, but once the Covid-19 pandemic struck, the move looked like a strategic genius. With more nimble digital offerings, McDonald’s was able to bounce back quickly from the depth of the pandemic:

  • As McDonald’s profits fell 22% to $ 4.73 billion in 2020, the company recovered and beat 2019 pre-pandemic sales by 7% in the second quarter of 2021, netting 5.9 billions of dollars.
  • In October, McDonald’s reported sales growth of 12.7% and earned $ 6.2 billion, while fast food competitors like Burger King – whose sales fell 1.6% in the third quarter – were still in difficulty.

So why sell? : McDonald’s business is back in full swing and the new technology is successful, which begs the question: what is going on here? Financial data for the Dynamic Yield deal was not disclosed, although McDonalds has said it intends to continue using the technology. Dynamic was reportedly stuck hawking burgers under the golden arches.


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