We Got Funded: Bahrain-Born Food Tech Startup Eat On Its Recent Fundraising Win
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Eat, a Bahrain-born regional restaurant reservations platform, has raised an undisclosed amount of investment led by VC firm Middle East Venture Partners (MEVP). Existing investors Tenmou, Pinnacle, and 500 Startups also took part in this round, and with this, the total funds raised by Eat are now at US$3.4 million. “MEVP’s investment [the current round] will help us accelerate our growth, and expanding our offering across the Middle East, as well as scale our team size and product portfolio,” says Nezar Kadhem, founder and CEO, Eat. Besides helping Eat accelerate its growth, the entrepreneur believes that MEVP’s expertise in SaaS, scheduling software, and restaurant technology can aid them in scaling the platform.
From the investor perspective, Walid Mansour, Partner and Chief Investment Officer, MEVP, believes Eat offers a strong product and is backed by a model that is “sustainable and valuable in the medium/long run.” He considers the startup “a true success story out of the Bahraini entrepreneurship ecosystem,” and notes: “Eat is well poised to become the leading provider of tech solutions to F&B players across the MENA- beyond its current core markets, and beyond table management.”
Following Kadhem’s own tedious experience in early 2013 in trying to make a reservation at a restaurant, Eat is a result of the entrepreneur’s efforts at finding a better way to do the same. “Reservations over the phone are time-consuming and frustrating; if I can book an Uber or reserve a hotel room online, why can’t I do the same for restaurants,” asks Kadhem. Launched in 2014, Eat now covers the entire MENA region, with customers in Bahrain, UAE, Kuwait, and Saudi Arabia, among others. Eat also claims to have paying customers based outside the region, from over 35 countries globally, and reports to have “seated more than 3.5 million customers to date, generating over $250 million worth of orders for restaurants in mainly two countries so far- Bahrain and UAE.” On the supply side, Eat says it has grown its restaurant base four times over the last 12 months, and monthly revenues by over 250%. “Currently, our business model includes selling our SaaS product, and making a commission on each actualized online reservation,” Kadhem notes.
Elaborating on the fundraising process and the team’s takeaways from it, Kadhem says that the process is (not surprisingly) a “long and tedious” one, and the time from the initial contact to having the funds in the bank can take up to six months, and often longer. “Therefore, we have made it a point to maintain relationships and open communication with all major VC funds in the region before any fundraising takes place,” he says. “We typically send a report every quarter to every major VC, updating them on Eat’s progress and achievements. That way, when the business becomes the right fit for the VCs, they typically reach out to us, which was the case with MEVP.” As for the negotiation skills that entrepreneurs need to work on to close a deal on favorable terms, the founder is emphatic that it all depends on leverage. “It really helps when more than one VC is involved, as this allows for counter offers. Also, cash in the bank is leverage, allowing you to extend the negotiation process, or decline the offer and search for a new VC, all while continuing to run the business. Having no money means there is immense pressure to just accept the offer due to urgency,” he explains.
While its fundraising strategies seemed to have worked in the startup’s favor, Eat is now working on its vision for its extended growth. “We’re positioning Eat to become a platform for restaurants to acquire users online,” notes Kadhem. “Restaurants plug into us, and we activate online reservations for them across a multitude of the largest B2C channels, including TripAdvisor, Google, and Time Out… No one else is doing this.” He adds that their “robust table management system and consumer facing app” is also a plus, and so is their availability and brand recall globally. “We have paying restaurants in major markets like Australia, USA, and UK, but also in smaller geographies like Malta, Guam and Ibiza,” he says.
Given its food tech focus, I can’t help but ask Kadhem if we’d soon see Eat make an entrance in a related vertical- food delivery, where it’d have to compete with the likes of Deliveroo and Uber Eats. He replies, “At this stage, it makes more sense for us to focus on our vertical and keep building on our offering to become more rooted at the restaurant level. It will be easier to enable online delivery, as well as other verticals such as automated marketing, loyalty, etc. at a future stage once we’ve completed the ecosystem part.”
In line with this thought process, the company’s short-term goals are to develop the product, and grow the team that would help them expand- especially in other GCC countries. Having said that, the company also claims to have something “exciting” in store for their users in the medium-term. “We’ve been working on eat0x- the world’s first blockchain product in the food tech space,” Kadhem says. “eat0x will address major challenges in our space, including payments and filling seats when restaurants need it the most.” We’ll have to wait and watch to see how this plays out though- keep your eyes on Eat!
Nezar Kadhem, founder and CEO, Eat
What are your three top tips for the region’s startups to secure investments for their ventures?
1. Get traction. “Before you even begin thinking about pitching, grow your business. Get some traction in the industry, and focus on creating a product or service people want.”
2. Become a part of the ecosystem. “We understand running a startup is difficult, but it’s incredibly important to make the time to attend conferences. It helps to show up and make your presence in the ecosystem known. We make it a point to attend regional conferences such as STEP, GITEX, etc., whenever we can. Over time, you start to see the same faces, and the industry starts to feel more familiar.”
3. Share your updates with relevant stakeholders. “It’s okay, and even encouraged, to be transparent about your results. Whether you do this on the web through an official blog post, or by sending quarterly reports to some of the biggest investors in your industry, it’s great to let people know what you are up to.”