As restaurants around the country begin to open back up in the wake of the COVID-19 pandemic, SevenRooms, a startup that helps hospitality businesses use data about their guests to provide more personalized experiences, raised $50 million in Series B funding.
The round was led by Providence Strategic Growth and will be used to expand globally and innovate the company’s product. To date, SevenRooms has raised more than $70 million.
Ordinarily, businesses like restaurants and hotels have very little data on their customers, which makes it difficult to cater to their needs and market to them for future business. Co-founder and CEO Joel Montaniel likens the problem to a doctor’s office without any patient notes.
“We found this was really odd because this is the hospitality industry. It’s all about making people feel special, it’s all about the little things and you need the guest data to do that,” Montaniel told Built In. “So that’s really what we set out to do, to help them have a better understanding of their guests, which you can then translate into a better service, better marketing, and then, ultimately, more profitability for the operator and a better experience for the guests.”
Founded in NYC in 2011, SevenRooms has received investments from the likes of Amazon and Comcast Ventures, accumulating clients all over the world including brands like MGM Resorts, Chase Hospitality Group and Live Nation. However, the COVID-19 pandemic presented a significant hurdle for both the company and the hospitality industry in general.
“It was really scary for operators because, when everything shut, they literally had no way to communicate with their guests. They had zero data on them,” Montaniel said. “For some of the operators that weren’t using SevenRooms, they could only go to the third-party companies, which were charging, in some cases ... pretty exorbitant fees.”
To help, SevenRooms launched a new product that provides commission-free delivery and pick-up to its clients. Montaniel says the company had originally planned to roll out this platform in the second half of the year, but they accelerated it in response to the pandemic.
The goal is that this new tool, coupled with the other products SevenRooms offers, will allow businesses to collect data on their customers even if they are closed or have limited operations. That way, once they do reopen, they have a wealth of information to accommodate their guests in a more personalized way, even if that guest hasn’t ever stepped foot in the restaurant before.
Going forward, Montaniel predicts the pandemic will have a lasting effect on how customers interact with the hospitality industry, that this reliance on delivery and contactless pick-up isn’t going away any time soon. However, he also thinks this period has made us all appreciate in-person experiences more than ever before, making SevenRooms’ mission that much more important.
“When we think about what’s happened in restaurant technology, hospitality technology, the innovation has really just been about the transaction.... The experience hasn’t really been innovated upon,” Montaniel said. “I don’t think about the shoes I have, the shirts I have, those things don’t excite me. It’s really about when can I get back to having experiences with my friends and family? I think we’re going to value those even more.”
