Aussie online ordering platform HungryHungry has scored $2 million in Series A funding, after the COVID-19 pandemic accelerated innovation in the hospitality sector, and led to a six-fold increase in orders through the platform.
The round was led by Brodie Arnhold, chief executive at insurance comparison site iSelect, and a director at Aussie growth capital fund Bailador Technology Investments.
HungryHungry is headed up by co-founders Mark Calabro and Shannon Hautot, who also co-founded OrderMate and grew the business to a platform that has processed more than $3 billion in orders.
In August last year, the co-founders pumped $2 million of their own cash into their new venture, in a bid to counter some of the tech developments that have squeezed the margins of hospitality businesses over the past few years.
Of course, things have changed in the hospitality space since then.
HungryHungry was built as an online ordering platform for pick-up, and an at-table ordering system for eat-in diners, while offering marketing tools to put the power back into the hands of restaurateurs.
When COVID-19 hit, forcing hospitality businesses all over the country to switch to a takeaway-only model, the co-founders changed tack to create a broader solution for takeaway, delivery and pick-up, including a curb-side contactless pick-up solution.
“It’s been a complete rollercoaster,” Hautot tells SmartCompany.
“COVID forced us to quickly think about our business and the future of hospitality,” Calabro adds.
The founders wanted to help the industry shift to meet the new environment, but also to help them build their online presence.
“A venue could cultivate their brand and create a digital asset that they would be proud to showcase on their website, or have a QR code on their tables for ordering,” he explains.
However, the business has grown considerably throughout the crisis. The founders don’t disclose any detail around revenue growth, but the team has grown from 13 people in March to 64 today.
The number of orders the platform is processing per week has also increased considerably, Calabro reveals.
“We’re well over the 60,000-orders-per-week [mark],” he says.
“That’s grown from about 10,000, pre-COVID.”
A COVID-19 shift
Hautot and Calabro admit that raising in the middle of a global pandemic hasn’t been the easiest of tasks. But, it’s also the COVID-19 environment that makes the timing right for the startup’s next phase of growth.
“We’ve just seen the consumer mindset change,” Hautot says.
The pandemic has fueled a mass shift to online, with people who may never have used digital ordering tools doing so for the first time. Also, hypervigilance around health and hygiene means any tech that reduces contact is welcomed with open arms.
“That’s really shrunk our education process,” Hautot explains.
The founders were expecting it to take three to four years for people to jump on board with this kind of tech. Instead, that’s happened in three to four months, he adds.
This funding will first and foremost be used to further develop that tech.
“A big part of what we want to do is create community,” Hautot says.
“The funding allows us to develop our software to a point where it’s not just an online ordering app — it’s more about how we communicate to our audience and how do we allow merchants to really engage with their audience,” he explains.
“A more engaged audience is a happy audience,” he adds.
No turning back
The health crisis may not be over yet, but Aussie bars and restaurants are starting to reopen. Even in metropolitan Melbourne, the reopening date is drawing ever closer.
But, COVID-19 has irreversibly changed the way the hospitality sector operates, Calabro says.
“We were already in an on-demand world, pre-COVID,” he notes.
“A lot of people who weren’t transacting online, they’re all making that leap.”
Calabro notes that people quickly got used to making transactions using their mobile phones.
Ordering food on your phone either in a restaurant or for takeaway is a “natural extension of that behavioural change”, he says.
“There’s been a massive shift in a short amount of time,” he adds.
“There won’t be any turning back.”
At the same time, Hautot notes that hospitality businesses have historically been a little slow to adopt technological change, and perhaps a little set in their ways.
But now, there is a willingness — and a need — to make that shift.
“It was all about bringing people into the venue and enjoying the experience. In the world of COVID, that can’t happen,” he says.
“Everyone has to get a bit creative on how they still get that to the masses,” he explains.
“It’s opened up a lot of eyes in an industry that has sometimes been a bit shy of using technology. They’re a lot more comfortable with it.”