Restaurant reservation platform, Eatigo, has received an 8-figure follow-on investment from existing investor, TripAdvisor, bringing its total funding to over US$25 million to date.
The funding will help Eatigo launch in more markets and strengthen its foothold in existing ones, and extend its product offering to users beyond time-based discounts.
Eatigo is present in six countries, including the Philippines, Hong Kong, India, and Malaysia, and has over four million users.
“The cooperation with TripAdvisor spans several areas. On top of funding, they provide valuable support on scaling our company, structure and processes,” said Co-founder and CEO, Michael Cluzel.
“We also collaborate on the commercial front – from common sourcing to selling Eatigo inventories on TripAdvisor.”
According to them, they have the largest inventory of discounted restaurants offers in the region with over 4,000 restaurant partners, from hotels and fine-dining establishments to restaurant chains and neighbourhood eateries.
Bertrand Jelensperger, Senior Vice President of TripAdvisor Restaurants and founder of TheFork said, “TripAdvisor’s continued partnership with Eatigo will help us both better serve millions of diners and restaurant owners who are increasingly turning to online channels.”
Capacity Problems Eating Away At The Restaurant Industry
The company quoted a Euromonitor report that stated restaurant sales in ASEAN is worth more than US$100 billion in 2015, but the restaurant industry only operates at 35% capacity.
However, Cluzel explained that overall sales are not slumping, describing it as “stable to growing modestly”.
“The competition for this rather stagnant pie is intensifying and restaurants that do not embrace efficiency driving tools are clearly at a disadvantage,” he added.
“Some restaurants would rather close down than give a sustainable discount and increase profits, but the market will sort this out over time.”
The company aims to shift a cultural behaviour to get more diners eating at off-peak hours.
Cluzel understands that changing human behaviour requires “either a lot of time, resources, or a really good reason”.
“At Eatigo, we provide our users a really good reason to be more flexible in their dining habits with our best in-class discounts that come without any form of prepayment,” he said.
He expressed confidence that this change will be successful as there is an “increase of people with increasingly flexible work hours” led by the millennials.
Additionally, he reckons, “[There] is no such thing as a fixed ‘slow hour’ – each merchant has different slow times so our users can find great offers at pretty much any time of the day.”
He noted that the Singaporean restaurant scene is highly competitive and has a high turnover rate, so foodtech solutions are crucial in negating high overhead costs by restaurants and drive traffic.
“For some of our merchants, Eatigo represent 20%, 30%, and in some cases 40% of their daily traffic. The impact we have on their businesses is very real,” he stated.
Cluzel added that Eatigo guarantees merchants to be profitable on “every single diner [they] send”.
“The mathematics behind the unit economics are sound and the fact that we have managed to build an overall inventory of thousands of merchants that are happy to stay on Eatigo shows that the business model is sustainable.”
Restaurant partners can use the Eatigo merchant app to set the discounts and the time of the discount, giving them full control of the amount of traffic they want, instead of how much discounts they have to give.
“We want to make adjusting this as easy as possible for restaurants to manage and help restaurants find the right balance. This is also why we offer suggestions to restaurants and even have a system to evaluate the restaurant time and discount calendar,” Cluzel said.
“What we cannot guarantee to our merchants is specific absolute profit per month as they are the ones themselves controlling the yield calendars, which in turn impact user traffic,” he clarified.
“Some merchants focus on percentage profitability of our users while others focus more on absolute traffic and others, on a mix of both.”
“Connect Empty Stomachs To Empty Tables”
The Thailand-based platform is founded in 2013 by Cluzel along with Singaporean Judy Tan who is Director, Pumin (Louis) Yuvacharuskul as Director, and Siddhanta Kothari as Chief Financial Officer.
More than 700 restaurants in Singapore are on the Eatigo app, and over 500,000 diners use the app every month in Singapore.
According to this, Eatigo delivers time-based discounts of up to 50% of all participating restaurants everyday.
Discounts apply to every item on the menu and users can book their seats free without any credit card information or coupons.
According to Cluzel, Singaporeans are “smart diners and appreciate the savings” the app can give us.
Singaporeans also have the highest share of lunchtime booking across all their markets, tend to reserve more in advance than other countries, and react more favourably to pictures of restaurant atmosphere than food itself.
Cluzel explained that Eatigo is free for diners because they charge restaurant partners a commission fee for each attended diner.
“Since we have the capacity to shape the user traffic for our merchants to arrive exactly at the times they need and want it, we are able to charge a premium fee versus market averages.”
Featured Image Credit: Eatigo