Chinese tech group Tencent has led a $ 96 million investment round in restaurant technology company Flipdish, raising its value to $ 1.25 billion. That’s more than 10 times what we achieved in last year’s funding round.
Flipdish provides technology for creating food ordering apps. This is a fast-growing business during a pandemic where many restaurants realized that they needed to create a takeaway service from scratch.
The deal highlights investors’ interest in companies servicing the fast-growing courier sector.
Thousands of restaurants registered for distribution apps such as Deliveroo and UberEats during the pandemic, but Flipdish shows how this model can eat up restaurant profits at high fees and prevent businesses from using larger platforms. It states that it provided.
Delivery aggregators say commission rates are spent on marketing and technology to increase restaurant demand.
Conor McCarthy, co-founder and CEO of Flipdish, said the relationship between restaurants and delivery aggregators became more “dangerous” as aggregators created their own food brands and began competing with restaurants for orders. Said.
Based in Dublin, Flipdish has about 7,000 restaurants using the technology in 25 countries, compared to more than 50,000 restaurants using Deliveroo in the UK. However, McCarthy said that a “decent subset” of Flipdish’s clients usually cease to use delivery aggregator services due to their high cost.
Flipdish charges the restaurant 7% per order, while Deliveroo charges up to 30%. The Irish company tripled sales in 2020 and doubled sales in 2021, but refused to give concrete figures.
Deliveroo states that the platform “allows restaurants to reach customers that cannot be reached by delivery otherwise, while providing a variety of services that support the growth of the restaurant.”
In the latest round of funding, Tencent paid about $ 80 million for less than 8% of the business, while McCarthy and his brother and co-founder James retain control of the board. increase.
Tencent, one of China’s largest companies and a major investor in home delivery services, is also backed by German food delivery company Gorillas and is a major shareholder in China’s delivery app Meituan.
McCarthy said: “I’m looking forward to choosing Tencent’s mind, but at the same time, I’m running the business as I did in the last seven years. You don’t need Tencent’s expertise to grow.”
The funds will be expanded in markets where we already have operations, such as the United Kingdom, Ireland, the United States and France, and will be used to hire 700 staff this year. It currently has 320 employees.
Independent food sector analyst Simon Stenning said tech companies like Flipdish could struggle to compete with Just Eat, Deliveroo, Uber Eats and others as big platforms are “incorporated” into the restaurant’s business model. Said there was sex.
“It looks great if you have your own app [and] Sounds great, but consumers don’t want to use them. Having multiple brands in one app that works for consumers stays here. “
Flipdish valued at more than $1bn in Tencent-led funding round Source link Flipdish valued at more than $1bn in Tencent-led funding round
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