When the history of the mobile revolution is written, the chapters on payments, media and small businesses will be among its richest reading. And while we anticipate that the complete history of the mobile wallet wars will be very interesting, for our part here at PYMNTS we’re mostly looking forward to the chapter that talks about how mobile + technology + payments has improved our relationship with food.
To say mobile changed eating would be something of an understatement. Where we eat, when we eat, how we eat and even what we eat have all undergone subtle but notable transformations over the last 10 years. Whether that comes in the form of payments-enabled reservations applications, or mobile take-out ordering, or grocery delivery, or commerce-enabled recipe hunting, entrepreneurs and investors are increasingly swayed by the idea that the way to tap the potential mobile consumers of the world is through their stomachs.
“Can you say Maslow’s Hierarchy of Needs?”
This was the question MPD CEO Karen Webster posed in her commentary this week about why Amazon might just be primed to do to groceries what it did to books – because people have to eat, and so food is an excellent place to build new and exciting consumer habits.
And though Webster was talking about the grocery market – the Maslow Hierarchy thing probably has a lot to tell us about why whether eating in or dining out, the process of filling humanity’s most baseline need has taken so quickly to digital and mobile.
“We’re focused on making every part of the dining experience better both for the diner and our restaurant partners. At the end of the day for us that means all of the interaction that happen between the diner and the restaurant at every step along the way we hope to improve those interactions and make them as simple as possible and as elegant as possible as well.”
That’s Greg Hong, the founder and CEO of Reserve – a dining concierge app that helps connect patrons with restaurants. Reserve is up and running in four U.S. cities currently – New York, Boston, Los Angeles and San Francisco – with a planned expansion into Chicago in the near future.
While Reserve bears some resemblance to others in the space – namely mega player OpenTable – it allows users to reserve spots in a restaurant, and like Yelp it helps users pick a place via reviews – but it also further Uberizes the experience by tying the payment directly to the reservation.
“We handle payment automatically and seamlessly,” Hong told PYMNTS in a recent conversation. “As a diner you put your card on file with us and ultimately it’s treated like a house account for a diner. It’s a really great way to end the dining experience. If you’ve ever been out to eat and been fumbling around for your wallet – it’s nice to not have to deal with the payment in the dining experience. And we see a lot of validation of that on our social media channels.”
Reserve has had a rather active 2015 so far. In February the firm announced it had closed off a $15 million Series A Funding round. That round saw investments from Human Ventures Capital and Expa — the startup lab created by Uber co-founder Garrett Camp. Other contributors in the recent funding round are reportedly First Round Capital, Lowercase Capital, Advancit Capital, Sherpa Ventures, SV Angel, Venture51 and Visionnaire Ventures. Reserve also attracted some fairly high profile angel investment during its Series A round – Jared Leto, Jon Favreau, and rapper Will.i.am all reportedly invested in the last round.
“We look forward to bringing the Reserve experience to a broad array of restaurants and guests, and helping them at each and every meal,” Hong wrote when the funding was announced on the company’s blog.
And just yesterday, Reserve announced two new acquisitions to further its aim of bringing a finer restaurant experience to the masses. The startup has bought two other startups to broaden its offerings: Zurvu, a New York-based restaurant reservations app, and HAIL, a Santa Monica-based startup that makes an app for splitting the check with a group of diners.
“As we had started talking we realized we had a lot of shared methodology and mentality for the restaurant space and as we talked more and more we realized there was an opportunity to partner up and bring them onboard,” Hong told PYMNTS on the Zurvu acquisition. “That expands the restaurant base and also makes our service available to more people. As part of our funding process we want to really continue to expand.”
And that expansion, Hong noted, also means offering Reserve customers more flexibility on how the payment will happen. While one individual might want to pick up the check – Hong told PYMNTS that diners also tend to experience friction when a check needs to be divided. HAIL has really thought through the best backend process for splitting up a check – making them a natural addition to Reserve’s repertoire.
“I had been speaking with Dan Anderson, their CEO, and as we started talking to Dan and what they had to offer I really, really appreciated their approach to technology and was aware of what they were doing in the space. There was a lot of synergy between the vision and the approach to the payment space in general as well as strategic decision not to integrate into the point of sale. When we looked at what they had to offer, it made a lot of sense to pull that into what we are doing as well.”
Reserve, above and beyond its enhanced funding and new acquisitions is also expanding what its platform offers in terms of value added for users. In the last month, the app has also rolled out a new feature that makes recommendations based on users’ past choices and reviews. The point, says Hong, is to build a platform that really functions as a dining concierge – from the moment the consumer realized they are hungry to when the check is paid.
He knows his company isn’t alone in pursuing that goal – but he’s not overly worried about it.
“Making that happen each and every time at every step of the way is the biggest difference and what we offer over other people in the space. In my opinion, there is no one going after it as completely from start to finish as we are.”
Ultimately what Reserve has tapped into is a little piece of what makes food service of many stripes so tempting to mobile ecosystem players – hungry consumers are highly motivated, highly sensitive to even minor inconveniences and ready to do whatever it takes to make getting in front of a meal happen as quickly and easily as possible.
If Reserve can get them there, they might have a seat at the big kids’ table in mobile payments.
The first week of April 2015 saw $2.2B in financial activity across investment types.
The biggest transaction of the week was the acquisition of Fundtech by D+H for $1.250B, followed by $650M in debt funding when CAN Capital picked up with Wells Fargo as a primary investor. Retail payments was 41 percent of the week’s activity, while the Fundtech acquisition and a $1.10M first-round investment in StarOfService led things on the commercial payments side.
Venture backed and strategic investments in retail payments were worth $918M in the first week of April. Most of that action was divided between Alternative Finance, Banking and P2P areas – which collectively represented 85 percent of all dollars invested.
Andreessen Horowitz was the most active player this week – participating in two deals. The U.S. was the most active region followed by Europe ex-Russia.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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