With US $8 M new funding, Singapore-based Chope forks out easy option for online dining reservation in SE Asia. Will India be next?Dipti Nair
“From the outside it didn’t look like a winning business model for a long time.” In an interview with OpenTable CEO Matt Roberts in 2013, ‘Forbes’ magazine wrote how “victory did not come easy” to the 16-year-old US company, and it started making money only after 10 years. Today, the San Francisco-based, Nasdaq-listed company is the largest online dining reservation player in the world. It was acquired by Priceline Group in 2014 for $ 2.6 billion in cash.
“These are really exciting times. There is a lot of consolidation in the F&B and travel sectors globally and we will make the most of it,” Arrif Ziaudeen, Founder of Singapore-based Chope, Asia’s leading online restaurant reservation platform, tells YourStory, in a Skype chat from Singapore.
Citing the examples of OpenTable in the US and acquisitions this year by Tripadvisor of IENS, a Dutch restaurant review website; SeatMe, a Dutch website for restaurant reservation; and a Portuguese startup BestTables, Arrif feels it is a matter of time before all eyes turn towards South East Asia.
But as Chope’s recent success indicates it may be sooner than later.
South East Asia raring to go
Chope enables users to make instantly-confirmed reservations and queue through Ticktok (a recent integration allowing Chope to be a full service solution to busy restaurants) via their smartphones. Chope also provides marketing services to restaurants in Singapore, Hong Kong, Shanghai, Beijing, and Bangkok.
The company has grown rapidly, more than doubling revenue and seating over 20 million diners to date. In June this year, the group raised US $8 M (SG$11M) in an investment round led by F&H Fund Management (led by John Wu, ex CTO of Alibaba Group), a leading Asian investment firm, along with NSI Ventures, the venture arm of US $1.8 B Northstar Group. DSG Consumers Partners, Frontier Ventures, and Singapore Press Holdings also participated in the latest round of fundraising, along with other leading Chinese investors.
The company had earlier raised US $3.5 M since its launch in 2011, making the latest round its largest ever. Says Arrif,
Asia is still behind its American and European counterparts. We are playing a bit of catch up here. Businesses that manage to replicate those in the US and Europe will no doubt make a lot of money, but real innovation is still happening in the US. They have the resources to fund risky projects. You need both the kinds of businesses in the world: one, to innovate, and two, to expand the idea to the world.
Talking about the startups in Asia, and specifically in India and Singapore, Arrif explains that most of the new businesses are “inspired.” But that is not to say that one can replicate the business in its entirety with eyes shut. “Heavy adaptation is required in the Asian markets. There is a reason why OpenTable is confined only to the US. It is difficult to understand or adapt their business to cultures here. The companies that succeed in Asia tend to be different from the ones that succeed in the US,” he adds.
Chope’s plate looks good
Chope has over 700 restaurants on its network, and diners can make reservations 24 hours a day, seven days a week from anywhere in the world. Today, whether it is India or Singapore, people have easily adapted to the culture of booking taxis and hotels online. However, though the culture of reserving table in restaurants is popular in most South East Asian countries, in India, it is yet to be adopted on a large scale.
Having lived and worked in countries across the globe, including San Francisco, India and Singapore, Arrif is finally settled in Singapore with his family. “While I was working as a financial consultant in a large organisation, Chope began as an after-work project,” says Arrif about the beginning of his startup journey.
Along with a couple of friends, Arrif would visit restaurants in Singapore and ask them if something like this would work for them. They showed interest and wanted to know when he was going to start the business. “Quite unexpectedly, it all snowballed. More restaurants were signing up, and they wanted different features and functions in the technology. We had about 20 clients, and it was becoming very time-consuming. I decided if I have to take it up seriously I had to give it more time,” recalls Arrif.
He decided to take a six-month sabbatical and try it out.
I told my employer that I will be taking a break. He said something insightful: ‘nobody will invest in a part-time entrepreneur.’ Entrepreneurship is a full-time calling. If you want to do it, you have to jump into it. You cannot put one foot into it.
Thus, it was partly a pull from the industry (“the restaurants said yeah it was a good idea”), and partly a push from his friends and old employer (“who said, go do it, you can always get a job later”) that brought Arrif where he is today. “I was 29 then, single and exploring my options. A lot has happened in these four years. Along with building my company, I have also built my life,” he says. From living with his parents to getting married and now the father to a baby girl, Arrif’s personal journey has kept pace with his professional one.
Not to say that it was all a smooth ride. “There were a lot of disappointments, more downs than ups. It wasn’t as if we just went to a restaurant and said here’s your technology. It took us months and months of building the features they wanted, and then they would tell us it was not working out for them. Then one day, a restaurant gave us a chance, and today they remain among our most loyal customers.”
Singapore and India
In April this year, DSG Consumers Partners (one of Chope’s investors) invested in media celebrity Vir Sanghvi’s EazyDiner, a restaurant concierge and table reservation platform in India. The investment firm which backs well-known names like Sula Wines, Smoke House Deli and other F&B businesses in India, recently announced that it was looking to actively invest in early-stage consumer businesses and partner with entrepreneurs building a market leading business in their niche in India.
As investors of Chope, are they making ground for its entry into India? In an email interview from Italy, Deepak Shahdadpuri, Founder and Managing Director of DSG Consumer Partners, told YourStory, “Chope was already the market leader when we invested, and EazyDiner is the first to offer real time reservations in India. Although they (EazyDiner and Chope) are independent investments, I have introduced the founders to each other. There is so much each can learn from the other given that Chope has more than three years’ experience working with diners and restaurants, and EazyDiner has emerging market specific learnings. It will be interesting to see if they work with each other or if they decide to compete,” he says.
Arrif reveals that though it is “very early days for us” to enter India, “but it is part of the plan.” He adds that Mumbai and Delhi are huge dining cities and no one has yet dominated the Indian market.
“In India, the culture of reserving before you can go out dining is less as compared to Singapore and Hong Kong where it is tough to get a table without prior reservation. Considering many people are already doing their daily bookings, shopping and communication on mobile, it is just a matter of time before we see an explosion in this space as well,” he says.
According to the World Bank 2015 ease of doing business data, Singapore ranks at the top while India is placed at the deep end at 142. Talking about the difference between the startup cultures in Singapore and India, Deepak says,
The two cultures are very similar and different at the same time. More and more your graduates are looking to start companies or work in startups after university instead of more traditional careers in engineering, law, medicine or other professions. The most obvious difference is that Singapore is a tiny market with five million citizens so most startups, albeit not all, have a regional or global outlook from day one. India is a very large market which allows entrepreneurs to create big businesses even when focusing only on India.
In such a context, how do investors like him see the restaurant reservation market evolving in India as compared to the rest of South East Asia? Says Deepak, “South East Asia is much more evolved and has had real-time restaurant reservations for many years. I see India tracking SE Asia which has tracked the US and Europe. I am convinced that in 10 years most people who eat out will make a reservation.”
According to Arrif, the India startup scene looks very exciting. “Among Chope’s 40 employees, we have a number of them who have come from India. We see heroes like Steve Jobs and Mark Zuckerberg inspire us to go and change the world than just working in a financial institute drawing a big pay cheque, and basically just moving money around.” On the negative side, Arrif would like to see more business solving real problems like water purification, environment, education, and health. “Today, everyone is into e-commerce, and services business, including us. We have a long way to go before we have entrepreneurs solving real problems.”
Deepak says that F&B business continues to offer tremendous opportunity through the value chain from farm to fork. He adds,
In India, there has been a lot of noise around #foodtech which has been loosely defined as delivery related businesses. I think we will see tech impact the whole value chain and DSGCP continues to look for outstanding entrepreneurs who want to use tech to create value anywhere in the value chain.
Arrif, who worked briefly with Zomato’s Deepender Goyal while in India, says the biggest challenge is finding the right talent, as “people with correct mindset and required talent can determine the success or failure of a startup.”
Chope’s basic business model is similar to those in the same space globally. It charges restaurants a monthly fee for software to manage bookings and track customer data, plus a percentage for every diner who makes a booking through their website and app.
A Singaporean Indian, Arrif, who did his MBA from Stanford, admittedly was always afraid to take the plunge. But once in, he is making sure he has a winning business plan on his hands.
Never give up, find a way around and navigate. It never happens the way you think it will.