Restaurants across the globe are dealing with a glaringly obvious problem: empty tables. For every hour that goes by, an empty table means owners miss out on revenue that could help offset their rent, utilities, and staff costs.
A number of apps are already trying to solve this. One of them is Manila-based BigDish, which offers users discounts of up to 50 percent when they book restaurants during idle hours.
The early-stage startup calls this “yield management,” a practice long adopted by airlines and hotels. Instead of offering promos that users can avail of anytime – to restaurants’ disadvantage – BigDish’s discounts are time-based.
Now present in Hong Kong, Jakarta, and the UK, BigDish recently made the bold move of listing on the London Stock Exchange (LSE).
I am Dutch. Since the age of 19, however, I’ve spend most my time in Asia-Pacific, having lived in Australia, Vietnam, Indonesia, the Philippines, and Hong Kong. I came to Manila while working for CompareAsiaGroup, a financial comparison platform started by Nova Founders Capital and backed by Goldman Sachs and the World Bank.
Aidan and I were introduced by a mutual friend who also had a tech startup. We started as a restaurant discount card but saw the model was outdated, non-data-driven, and had barriers to scale. We learnt about a company called Savored in New York which was a yield management platform Groupon acquired and subsequently closed. It seemed a smarter business model and this led to our investigation of yield management and its application to the restaurant Industry.
What are the common concerns preventing restaurants from joining discount dining apps? How do you convince them to get on board?
Some restaurants still associate discounts with the daily deal model. We make sure to convey what the differences are: restaurants are in full control over the discounts they give and seats they make available to ensure discounted diners only visit them at the times they want, and in the quantity they want.
Other apps like Eatigo and Offpeak are doing the same thing in the region. What makes you different?
The prime difference is perhaps our product and tech-focused strategy. BigDish has always heavily invested in its user experience. We have Asia’s highest rated food app with a 4.7/5 rating in the Google Play Store.
In the UK our competition – interestingly enough – comes from diner discount card schemes, with Tastecard being the main player. They have over 6,000 restaurant partners in the UK and more than 2 million members. We aim to get ahead of them by offering a product that we see as the natural evolution of dining discount cards. The status quo in the UK is that people have to purchase an annual discount card membership, call restaurants to check availability, and while paying, wave their physical membership card to get their discount. Our product lets people make a booking in just a couple of taps on their phone and have their discount automatically deducted from their bill.
How many monthly active users do you have right now, And how fast is that figure growing? How are you monetizing, and how much revenue are you making?
In Asia, we’re seeing double-digit, month-on-month growth in the number of diners we’re seating. We are monetizing by charging restaurants a flat fee per diner. We can’t give any absolute numbers at this time.
Why did you go straight to IPO – and why the LSE?
This had to do with our access to capital, which was primarily in London. It was also due to Aidan already having listed a company in London before and hence understanding the process. Aside from that, we felt that going this route adds most value to our investors. We haven’t raised any VC funds. We were relying on angel investments.
The LSE is a very prestigious exchange and has been very welcoming to us. They’re seeking to encourage more tech startups to list in London.
Most companies see IPO as a way to exit. Why did you choose to do an IPO at this early stage?
This is largely a misnomer that an IPO is a way to exit. It may be for huge IPOs but is a viable alternative to VCs when at an early stage of development.
What are the pros and cons of being a listed firm?
Pros: access to capital and liquidity for all investors are the main benefits. Cons: being a listed firm creates a “company within a company” as there is extra compliance and regulations that are not present in a private company. The governance standards of a listed company are also far more stringent. This is primarily in the area of disclosure where we are required to disclose material events. The financial reporting standards are also far more robust.
What do you plan to do with the money you raised?
So far we’ve primarily relied on organic growth and word of mouth, so we’ll be ramping up our marketing spend for a wider adaptation. On top of that, we’ll use the funds to further improve our platform. There are a number of things we have in the pipeline. One is revolving around AI. We’re currently exploring the application of AI in a way that, over time, will create personalized user interfaces to our users and helps inform discounts and seats availability.
Are you working towards becoming profitable or are you in growth mode?
Profitability is definitely something we seek to accomplish within 18 months. The most important thing is that the business fundamentals work. That means that we want to be in a position where we can choose to be profitable, or we choose to just re-invest in growth. There is nothing wrong with being purposively unprofitable; Amazon did that for years and it worked fine for them as they could have made the switch to profitability at any time. On the flipside there are companies who burn through cash but don’t have a clear path to profitability in sight. That is pretty much the last thing we want.
What’s your advice for startups looking to list as well?
Find someone who has done it before and have an open conversation with them about the process, the costs, the risks.
Currency converted from UK pounds. Rate: US$1 = £0.77
By Judith Balea
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