Telstra’s VC arm makes first local investment in Dimmi
Monday, June 25, 2012/
The venture capital arm of telco giant Telstra has made its first investment in an Australian company, entering into a deal with three-year-old online restaurant reservations start-up Dimmi.
Launched in September 2009 by Stevan Premutico, Dimmi is Australia’s largest restaurant booking network, designed to bring diners and restaurants together.
Since its launch, Dimmi claims to have seated more than two million diners at restaurants ranging from “hatted fine-dining establishments to casual suburban eateries”.
Dimmi works off a performance-based revenue model – restaurants pay between $1 and $3 per customer, or $6.60 a table, in exchange for using the Dimmi platform.
Earlier this month, Dimmi launched the dimmi.com.au website along with an iPhone app, which informs would-be diners which restaurants are nearby and whether any tables are available.
The Sydney-based business employs 30 staff around Australia.
Now Dimmi has secured funding from the Telstra Applications and Ventures Group, a subsidiary of Telstra founded last year by chief executive David Thodey, led by Deena Shiff.
The news comes just a few days after Telstra confirmed it led a $35 million Series E round in video services provider Ooyala, a start-up based in Silicon Valley.
Telstra signed off on the investment in Dimmi earlier this month.
While the financial terms of the deal are undisclosed, it’s understood to include a cornerstone shareholding in the business, in partnership with Village Roadshow.
According to Premutico, times are tough for the Australian restaurant industry, which is why Dimmi is so popular.
“Missing bookings or not filling tables can mean the difference between paying wages and covering overheads, or having to close the doors,” Premutico said in a statement.
Premutico said the Telstra-Village deal is as much about strategic expertise and distribution as it is about capital, but insists Dimmi will continue to operate as a separate entity.
“It’s really important for us to continue to operate as a small, fast, nimble business, and we continue to operate as Dimmi,” he says.
“We will just have additional ammunition supplied through new distribution channels and new partnership opportunities powered by Telstra and Village.”
Meanwhile, Shiff said in a statement more and more people are using online services because of the convenience and speed they offer.
“The Dimmi service neatly packages together the ability to search for a restaurant and click to reserve a table,” she said.
“One of the great potentials of Dimmi is how they can translate their current online service to mobile applications.”
“For example, being able to quickly search for a restaurant via your mobile is compelling.”
The deal came together after Dimmi ran a competitive tender process, seeking investors for the business after Premutico raised about $2 million in four capital raisings.
Dimmi is believed to have held discussions with James Packer’s investment vehicle Ellerston Capital.
In addition to Telstra and Village, Dimmi has 10 private shareholders. Its board includes Shiff, Village Roadshow executive Chris Chard, and LinkedIn managing director Cliff Rosenberg.
Dimmi is now preparing to launch a dining category on the BigPond Telstra internet service.
Meanwhile, Village Roadshow is planning a promotion whereby every customer purchasing a cinema ticket can purchase a restaurant ticket.
Dimmi has also entered into a partnership with Google. As of next month, Dimmi will be integrated with Google’s place searches in Australia.
In December last year, Shiff told ZDNet Australia Telstra has set aside $50 million to invest in technologies that align with its commercial and financial efforts.
“Ideally, we’re looking to make investments where they have a proven business model, customers and revenue, and ideally making a profit,” she said.
“Because we’re making investments based on strategic considerations, we’re not limiting ourselves in terms of size. They basically have to meet strategic and financial hurdles.”