Quandoo today announced a $25m investment led by Piton Capital (our fourth co-investment) and it’s great to be able to say that we and all the major existing shareholders participated, namely Holtzbrinck, the Sixt family and Texas Atlantic Capital. How can companies like Quandoo raise $25m so easily? The key reasons are great execution/strong unit economics, a scalable model and a large market opportunity.
Great execution/strong unit economics: Investors look for different things of seed, early and growth companies. Early on a great team and concept will get you funded but to put larger amounts of money at risk the economics need to be proven. Quandoo’s team of 30+ outstanding sales and implementation staff do such a good job bringing new partners on board that the payback on this acquisition cost is roughly a year, which is outstanding. On the consumer side, with literally millions of marketing campaigns and landing pages tailored to each restaurant, category, geography and price point the payback period on marketing is similarly short and much better in the more mature cities.
A scalable model: Quandoo are now in 8 countries with 3000+ restaurant partners and have seated 1.5m diners in 20 months since launch. The team have proven that the model is scalable and the great news is that they want to keep launching a new country every ten weeks. With this money the only missing ingredient is great entrepreneurs to help launch new countries across Europe, Asia, the Middle East and Latin America. So please get in touch if you know anyone!
A large market opportunity: With La Fourchette being acquired by TripAdvisor and Priceline acquiring OpenTable there is clearly a growing awareness of the local commerce opportunity. Our estimate is that only 2% of restaurant bookings are online compared to a majority of flight or hotel bookings for example, this could be a $25bn market within 10 years – just in Europe.
So I continue to be excited about Quandoo’s mission to deliver a great dining experience to consumers and to be the best way for restaurants to find new customers! I’m delighted to see this works as well in 8 countries as in Germany and am excited to keep working with the team and the other investors! Encore!