Big appetite for UAE restaurant locator start-ups

The food and drink industry continues to grow in the UAE, with an extra 1,600 outlets expected by 2019, according to a recent KPMG survey.

But it’s not only restaurant owners and suppliers who are reaping the rewards.

A crop of local, regional and international companies are taking advantage of consumers increasingly venturing online to find restaurants and book ­tables by creating platforms and apps that make the process easy and quick.

It’s a lucrative business. The US behemoth of the industry, OpenTable, like many competitors, has an app and online platform that consumers can use to browse their local eating options, and it sells subscriptions to its reservation management software to restaurants.

The platform itself was sold for $2.6 billion in 2014, and the market is still growing. Open­Table bought out its UK equivalent, TopTable, in 2010 but has yet to properly establish itself in the Mena region, although the company’s president revealed last year he was considering opening a Dubai office in 2016.

Meanwhile, half a dozen companies are competing to corner the lucrative Dubai market. The Berlin-based Quandoo and India’s Zomato are active in the UAE, as are three regional companies: the UAE’s own RoundMenu; ReserveOut, which was initially launched in Jordan; and Eat, which launched in Bahrain in 2014 and expanded to Dubai in 2015.

“There is no market leader in the Middle East,” says Eat’s founder, Nezar Kadhem. “We’re all trying to become first to market and earn the throne.”

Eat is the cheapest solution on the market, in terms of software subscriptions to restaurants, according to Mr Kadhem, and it has a young, stylish feel.

“I think that we’re the prettiest,” he says with a laugh. “Our app was built in 2015. We’re a much younger company, we’re all in our early 30s and late 20s.”

He says that he expects to close a funding round of $1.5 million in April, and wants to eventually expand to cover the whole Middle East.

“The market is big enough for two or three players,” says Zaid Jawad, the founder of RoundMenu, which launched in 2012 and is active in the UAE, Saudi Arabia and Singapore. “But it is a crowded space. There are definitely too many players at the moment.”

RoundMenu was first conceived as a platform for Groupon-style promotional deals at restaurants, but it has turned into a service that allows customers to choose and book restaurants, as well as order food to be delivered, with an emphasis on integration with social platforms such as Facebook and Insta­gram.

Its main revenue stream, Mr Jawad says, is from marketing and promoting restaurants through channels such as its mobile app, and it has more than 22,000 venues on its database. But it doesn’t licence technology like some of the other platforms.

Instead, it partners with other companies, such as Reserve­Out, the region’s biggest player according to founder Khalil Shadid, with almost 1,000 restaurants using its booking software.

ReserveOut was launched, like RoundMenu, in 2012, and although it has a website and app that allow users to browse restaurants in their area (which it will be growing this year), its focus is the software that it ­leases to restaurants.

ReserveOut is active in several emirates, as well as in Amman, Beirut, Manama, Doha and Jeddah, and Mr Shadid says its technology and dedication to prompt customer service make it stand out. The company is in the process of closing a $4 million funding round.

When it comes to the competition between companies operating in the same space, Mr Shadid says: “There will be consolidation, for sure.” ReserveOut has already bought out another UAE operator, Tawilati.

“We’re always looking to companies we can acquire to accelerate our growth, and I’m sure TripAdvisor or OpenTable or LaFourchette are looking to do the same thing,” he adds.

Mr Jawad agrees that US and UK companies are keeping tabs on the region, and that “they definitely have an eye on Dubai”.

Dubai is the region’s hub for online reservation platforms, with a steadily growing foodie scene and an international population, many of whom have fam­iliarised themselves with the process of finding and booking restaurants online in cities such as London and New York.

Expo 2020 in Dubai will ensure this upward trend continues, but even setting aside this event and the Fifa World Cup in Qatar, Mr Shadid says: “There is going to be more travel to the Middle East. There is going to be expansion in all sorts of industries, which will mean more people visiting, and more people dining out. It’s a very positive outlook.”

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