OrderMate founders pump $2 million into new startup that improves dining out without screwing over small businesses
Tuesday, August 13, 2019/
Having bootstrapped their first startup from their garage, OrderMate co-founders Mark Calabro and Shannon Hautot have now taken $2 million of their own money to launch a new hospitality tech venture.
HungryHungry is intended to make life easier for restaurateurs and cafe owners, as a counterbalance to some of the innovation that has driven their margins and profits down.
The startup provides an online ordering platform for pick-up, and at-table ordering and a payment system for in-venue diners.
Users can scan a QR code at the table, see images of the items on the menu, and order and pay for their meal there and then.
The founders have been working on the technology for about 18 months, and now have about 700 customers in Australia, and 50 in New Zealand. They have also recently launched with their first handful of restaurants in the US.
Speaking to StartupSmart, Calabro says the idea for HungryHungry came as a reaction to changes the two founders had seen in the hospitality industry.
Profit margins were tumbling, and things have been getting harder for independent restaurants.
At the same time, the foodtech businesses emerging have been largely focused on consumer satisfaction, rather than on supporting businesses.
“For the long-time professionals who have put everything on the line to open up their own business that they’re very passionate about, they had all these different headwinds,” Calabro says.
“Technology wasn’t being used for good, it was being used for bad.”
Over the past few years, we have seen large, international tech players such as UberEats and Deliveroo disrupting the industry.
Initially, Hautot says, the fees for using these services were low enough to make them sustainable.
“It was a new feature, and everybody got excited by it,” he explains.
But, as the big players started to grow and scale in the market, the cost of using their services increased.
If you asked any other business to pay a 35% commission on a delivery, “they would tell you where to go”, Hautot says.
“It’s not sustainable at the moment.”
HungryHungry is intended to help put the power back into the hands of the restaurant owners, by providing marketing and online ordering tools that are easy for consumers to understand and navigate.
And, having a visual element and easy ordering system means dine-in customers tend to order more, and stay a little longer.
“People just love to order that extra little entree,” Hautot says.
“We probably shouldn’t sometimes, but we still do.”
“We just did it”
Having met at university, Calabro and Hautot founded OrderMate from their garage, and bootstrapped to a point where the platform has now processed more than $3 billion in orders.
Now, the co-founders are involved only at the board level, leaving the day-to-day running of the business to long-time employees.
In the early days of OrderMate, getting VC funding was “the cool thing to do”, Calabro says.
And the founders did discuss the possibility. However, they decided “we were going to take control of our own destiny”, he adds.
“It was really through that organic growth, and all of the struggles you go through, that gave us that scar tissue to be a well-rounded business.”
Now the pair have a bit of cash, and while there’s no need to go back to the garage, they opted to self-fund HungryHungry, and achieve initial growth organically.
“We didn’t even really think twice about it, we just did it,” Calabro says.
“This is the future of foodtech, and something we believe is truly scalable globally.”
Hautot notes that, with HungryHungry, the founders wanted to make sure the product had a good market-fit, and achieved what they wanted it to.
“We didn’t want the pressures of having people who funded it to force us in certain ways, based on what they thought was best,” he says.
It was important for the co-founders to “make sure we had the full freedom to start off with to explore what we think is going to be the future of technology in restaurants”, Hautot explains.
“We have the industry experience, we’ve been doing this for almost 20 years, and we fundamentally know how restaurants work,” he explains.
Now, however, the co-founders are ready to bring in external funding, in their first capital raise ever, in a bid to fuel faster growth.
Now they have identified the pain points in the industry they can address, and proved they had another business model that could work, Calabro and Hautot are looking for investors that can help HungryHungry reach its full potential.
“It has full global scale,” Hautot says.
“We want this to grow as quickly as it possibly can.”
Calabro and Hautot have been in business together for 16 years, and studied together for five years before that, so it’s probably safe to say their partnership is working.
“Relationships between founders or investors don’t break up because of skill sets. They break up because of misalignment of values,” Calabro says.
“We’ve spent more time with each other than we have with our partners, or anyone else,” he adds.
When you work with a person for a long time, not only do you learn about them, you learn about yourself too.
“It’s about the maturity of running a business, and growing as people. It’s not a nine-to-five job,” Calabro explains.
“If I had my time again, I would do it exactly the same way.”
Hautot also notes the co-founders know each other’s strengths and weaknesses, and have figured out how to use their respective strengths to best serve the business.
“No one person can cover every single aspect of the business. It’s good to know what the other is good or bad at,” he says.
Now the pair are looking for external investment, they’re keeping this in mind.
“There are a lot of investors that have money. That’s not the problem,” Hautot says.
“You’ve got to make sure that you’re looking for the right kind of investor for you. One that’s going to add value to your business.”
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