McDonald’s announced it will be selling artificial intelligence company Dynamic Yield to Mastercard, with the transaction set to close in the first half of 2022. McDonald’s will still continue to work with AI tech firm and Mastercard on digital initiatives, the chain included in a press release.
The sale doesn’t come as a surprise, as many franchisees have complained that Dynamic Yield didn’t meet the sales increase they were expecting and that its technology failed to meet business expectations in the past.
“The acquisition by Mastercard will strengthen unique, existing synergies across McDonald’s digital engagement experiences currently powered by SessionM and Test & Learn.” McDonald’s said in a press release. “In addition, Mcdonald’s plans to further scale and integrate Dynamic Yield’s capabilities globally and across ordering channels.”
The deal reflects McDonald’s larger effort to outsource its technology rather than solely owning and operating it within the Golden Arches system. In roughly 20 years, Dynamic Yield was McDonald’s largest acquisition.
McDonald’s bought Dynamic Yield in 2019 for $300 million and integrated the company’s technology throughout its drive-thrus and ordering kiosks in the U.S., Australia, and Canada. The tech offered customers personalized promotions based on purchase data, time-of-day and year, currently store traffic, trending products, time-sensitive deals, and more. This past spring, McDonald’s was considering a partial sale of Dynamic Yield to retain the technology that enhanced its drive-thrus while also eliminating the portion that works with retailers to boost online sales.
The synergy between Mastercard’s payment expertise and Dynamic Yield’s AI capabilities has the potential to improve the mega chain’s digital ordering strategy and strengthen relationships amongst its loyal rewards members. Roughly $13 billion, or 20% of the chain’s orders in its top six markets, resulted from digital channels such as McDonald’s app, ordering kiosks, and delivery, according to McDonald’s third-quarter 2021 report.
The sale has the potential to ease tension sparing from the company’s technology spending and fees for operations between McDonald’s corporate and franchisees.