This Week in Australian Startups #38, 24th September 2023 - Consolidation in hospitality tech, a chat with Pablo & Rusty CEO Abdullah Ramay
Haris Qureshi
VP Sales & Customer Success @ Hatch | Writing @ This Week in Australian Startups
The one article I seem to keep referring back to this year is one I wrote in back in March where I wrote about the macroeconomic trends that will impact the startup sector globally along with 3 predictions;
We’ve seen all three happen, and this week we’ve seen two big consolidations occur within the hospitality tech sector in Australia.
First up is Ordermentum which acquired wholesale food marketplace Foodbomb for an undisclosed sum, along with a $16M oversubscribed capital raise which now values the combined group in excess of $100M. This makes Ordermentum Australia’s leading ordering and payments platform for the wholesale food and beverage industry with almost half of all Australia’ hospitality venues on its books placing more than $1.2B in orders each year.
James Frank MD at Brolly Capital is of the opinion with new investors joining this round, including Touch Ventures, Microequities Asset Management and Aditum Investment Management, we will see an IPO in the next 12 months.
But the bigger news story is the planned merger between me&u and me&u , which first broke out in May this year seems to be going ahead. Subject to shareholder approval it would be an all stock merger expecting close in November/December this year also meaning there would be no operational changes to either business until the peak season is over.
Combined the two companies generate $39M in annual revenue, processing more than $2B worth of transactions from over 6,000 venues across Australia, New Zealand the UK and the US - making it the largest QR code ordering and payment solution in Australia.
Whilst it’s still to be determined what the name and exact company would look like - Kim Teo , co-founder and CEO of Mr Yum, will be taking the top seat with Stevan Premutico , founder of me&u, sitting on the board as a non-executive director.
There’s some great coverage of the planned merger you can read which I’ll link to at the bottom of this article. I wanted to focus on what this means for the industry and what we can expect. A quote from Kim Teo that stood out to me with this announcement;
“Over the next few months, our combined company will launch a number of new products and features focused on elevating the interactions between staff and guests, as well as marketing tools to help increase foot traffic and revenue.”
Recently I was fortunate enough to sit down with Pablo and Rusty's Coffee Roasters CEO, Abdullah Ramay . Pablo & Rusty is one of the OGs of Australia’s coffee scene. They not only make one of the best coffees, roast some of the meanest beans but also have been on the forefront of adopting technology being one of the earliest customers of Deputy and both Mr Yum and me&u. On top of all that, they are also a B-Corp, Carbon Neutral Organisation and 1% for the planet member, as Abdullah puts it “delicious coffee with impact ;)”
I spoke about a variety of topics with Abdullah which included his passion for speciality coffee having spent over 15 years in the industry and even running his own ecommerce startup whilst at university in Canada and becoming a top-rated eBay power seller.
What we did spend most of our time discussing was the future of technology in hospitality and his predictions, and what opportunities a merger between Mr Yum and me&u could bring to businesses like Pablo & Rusty and the industry as a whole.
There are 5 key areas Abdullah summarised the opportunity space for the combined entity of Mr Yum and me&u;
There’s a huge opportunity to continue to drive further innovation in the menu experience for consumers. Digital menus allow venues to know their customer more deeply, and provide dynamic and personalised options based on what they know about them from their past orders. With AI advancing at such a rapid rate, it can also pave the way for smarter predictions on what any consumer might like to try next. Whilst it won’t replace the human to human connection, for venues operating at scale it could be an excellent way to provide that personal touch or when customers just don’t feel like speaking to anyone and want a self-service option.
My go to order is a cappuccino, but when it’s hot, usually 30 degrees or more I’ll get an iced coffee - weather data is one example of external data sources that could be combined with customer data to provide a superior service. With LLMs like GPT we’re probably not far off from being able to use voice enabled AI to ask your menu for recommendations where waitstaff aren’t available or you prefer not speaking to anyone.
The same AI/ML could be used to drive better personalised options - knowing if the person ordering is part of a big group, corporate meeting, or with a family and recommending something to share or a kids meal.
With a digital experience, orders taking too long can provide a prompt to staff to check in with the kitchen or customer and keep them updated or provide a free drink to keep them happy and provide the high standard of customer service we have become accustomed to in Australia. It can also help staff be notified when a VIP or big spender is coming in.
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Many venues have their own apps where they push through promotions or a birthday discount - Mr Yum and me&u are in the unique position of being the aggregator of data for almost every venue in Australia having millions of customers interacting with their system.
This creates a unique opportunity for them to provide net new customers to venues through targeted advertising and promotion.
One of the biggest values in being an aggregator of data is being able to provide industry wide insights and monetise it as well. Mr Yum and me&u have millions of data points, by leveraging ML and AI they can identify trends and provide highly actionable insights to venues as a new service offering. An example of this could be the rise of customers searching gluten free or dairy free food in certain post codes within specific demographics.
The future looks very exciting for a combined Mr Yum and me&u, and when I asked Abdullah his thoughts he summed it perfectly;
They have the opportunity to revolutionise the menu and ordering experience for venues and consumers. Something that has not evolved for decades. Everyone wins.
Coverage on the merge in Australian press;
Top News
Australia
Around the World
Australian Funding Rounds
International Funding Highlights
Investor | PhD
1 年Thanks for sharing Haris Qureshi!
CEO & Co-founder, me&u (merged with Mr Yum) | Hugs not handshakes | ???? ???? ????
1 年Wow, love the customer interview Haris Qureshi! Well said Abdullah Ramay! Thank you x
CEO at Pablo & Rusty's | Purpose-driven leader | Business strategy | Digital transformation | Scaling | Sustainability | ESG
1 年Great chatting to you Haris Qureshi. This space is seeing a lot of disruption and is ripe for more! Great to see some Aussie companies leading the charge.