Once upon a time, Brice Gumpel ran a food blog with his now-fiancée. As he delved deeper into the restaurant industry, he kept hearing how financially difficult it was to sustain that kind of business. He couldn’t understand how something as popular as restaurant dining could be unprofitable. His investigation into that question ultimately led him to launch Seated in 2017.
“Typically, things that are popular are profitable for the businesses that support them,” Gumpel, the company's CEO, told Built In. “Restaurants have similar business models to hotels and airlines. They are high fixed cost businesses that rely on volume. But restaurants are much smaller, they’re not multibillion-dollar enterprises. Restaurateurs are great at creating hospitality environments and cooking great food, but they’re certainly not marketing experts and they don’t have the funds to bring on marketing and pricing experts.”
Seated is a tool that can help restaurants handle those sides of their businesses. Originally a booking and rewards platform, its users could download the app, browse restaurants, book a reservation, and then receive credits for brands like Amazon or Starbucks for each reservation booked. The idea was to take over the customer demand side of things so restaurateurs could focus on what they do best: make delicious food.
But then, the COVID-19 pandemic hit. All of a sudden, restaurants across the United States and beyond could no longer serve dine-in customers and had to rely solely on takeout — a huge financial blow to most businesses.
This meant Seated had to pivot too. Now, with $30 million of fresh funding in its coffers and the recent acquisition of VenueBook, Seated is capable of handling all three revenue streams for restaurants: dine-in, pick-up/delivery and events.
The pick-up and delivery product offers users the same rewards program as the reservations and doesn’t charge restaurants any commission fees, a stark contrast to the 30 percent apps like Grubhub and Uber Eats collect.
“Our whole goal is to try and drive restaurants as much customer volume as possible at the lowest price,” Gumpel explained. “We are a restaurant-first business.”
The acquisition of VenueBook (the terms and price of which have not been disclosed) gives Seated access to its stable of 120,000 planners, allowing the company to handle event bookings, which typically account for as much as 15 percent of a restaurant’s revenue and 20 percent of its profits, according to the company. Now, restaurants can offer customers and businesses rewards for booking private events for small occasions like birthdays or large-scale celebrations like corporate holiday parties.
While pivoting to event bookings during a time when large events are frowned upon may seem like an odd business move, Gumpel is confident that events will come back. They just might look a little different.
“For a birthday party that’s you and 10 of your friends pre-COVID, you might have been willing to sit in a crowded dining space. But when things are back open for indoor dining, you might still be hesitant to bring that big of a group to a crowded space, so you might want to spring for a private dining room. Same goes for board meetings,” Gumpel said. “We think that, during the recovery, as restaurants do re-open, people are going to want to opt for those private spaces.”
Gumpel also says the idea for this has been a long time coming. Seated has always been able to facilitate event requests, but it was a very manual process. The company just decided to use this time to take a step back and build a product specific to this need, which hasn’t been very easy since Seated’s whole team has been working from home since March.
“We’ve had to go remote and then launch two different product lines. It’s been incredibly challenging,” Gumpel said. “But it’s really shown me how important it is to invest in the team. Without their efforts we would be nowhere. It’s truly incredible what they’ve accomplished.”
Seated’s platform is currently available for restaurants in its hometown of NYC, as well as Boston, Chicago and Atlanta. The acquisition of VenueBook expands its presence in the New York tri-state area, Denver, San Francisco and the Bay area, and Washington, D.C.
This $30 million funding round was led by Insight Partners, with participation from Craft Ventures, Greycroft and Rho Capital Partners. The money will be used to further develop the platform and improve on its dine-in, pick-up/delivery and event booking tools. Seated is also hiring, ramping up its product and engineering departments.
