KL startup Offpeak raises US$800K from China’s Gobi Partners
By Karamjit Singh June 23, 2015
- Malaysian startup to expand to 3 more countries by end-2015
- Platform aims to help restaurants, food court operators drive traffic
KUALA Lumpur-based Offpeak Hub Sdn Bhd, a 10-month old startup that is positioning itself as the Agoda (a hotel accommodation booking site) of the food and beverage (F&B) industry, has just raised US$800,000 from Chinese venture capital firm Gobi Partners.
The investment comes out of Gobi’s South-East Asia-focused fund based in Singapore, and will help Offpeak accelerate its regional rollout to at least three more countries by the end of 2015, starting with Bangkok in Thailand within the next few weeks.
What makes this funding round interesting is that Offpeak has secured its Series A with no clear business model yet, while offering its service for free.
“While there are a number of ideas in turning this into a sustainable business, for the immediate horizon, we will concentrate on expansion and a good user experience,” said Tan Ee Ern, one of three active cofounders and its business development director. A fourth cofounder is a silent partner.
In a statement, Gobi Partners managing partner Thomas G. Tsao said, “Offpeak offers a smart and functional solution to operational cost issues that restaurants regularly face, while also providing a one-stop food place for consumers who want to dine out.
“By being able to meet the needs of both restaurants and customers in such an elegant and practical way, we are confident that Offpeak is well-positioned for success,” he added.
Tan, whose father is a technology entrepreneur, and his cofounders (Tan Ban Eu and Lau Ngee Keong) launched their restaurant discovery platform with “well over” RM250,000 (US$67,000) of their own funds in August 2014.
Having generated a claimed 50,000 bookings since launch, with around 600 restaurants covered versus 250 in November 2014, Tan told Digital News Asia (DNA) that Offpeak’s traction validates the gap in the market the cofounders first identified when they launched their app and website.
“Sure, there are a lot of restaurant reservation platforms and deal sites targeting restaurants, but we are a yield management tool for them,” he said of the app that helps restaurant and even food court owners drive traffic to their venues during off-peak hours with special deals.
The app itself is available for the Android (pic) and iOS platforms.
Tan acknowledged though that the use of discounts, which he calls “sweeteners,” to drive customers tends to see the market viewing Offpeak as yet another reservation app.
“We have never been about reservations although the call to action is a discount. Offpeak is really championing the idea of instant gratification,” he said.
The location-based service allows customers to book a table at any participating restaurant within their vicinity, and walk in 10 minutes later.
Tan said that this ease of use and immediate execution of a booking differentiates Offpeak from reservation platforms where customers have to wait at least one day before using their booking. The location based feature also allows its restaurant partners to be “discovered,” in a sense.
Another differentiator is that any discount given applies across the menu and not just on select items, as tends to happen with deals sites.
Also, Offpeak does not allow its restaurants partners to give discounts higher than 50%.
The reason? “That is not sustainable and you end up attracting bargain hunters who are not loyal and will not come back,” said Tan (pic). Instead, Offpeak advises the restaurants to offer a discount they are comfortable to run with for the long term.
“That is why our stickiness is very high with the restaurants that are with us. Since we launched, about 90% of the restaurants are still with us,” he claimed.
And justifying the Agoda comparison, Tan pointed out that while restaurants tend to have various promotions to attract customers, in reality, they struggle to keep generating deals on a dynamic basis.
“That is where our platform comes in to help them,” he declared.
With US$800,000 to fund its growth regionally and throughout Malaysia (it is mainly Klang Valley-based now), Tan and his cofounders will have time to nail that business model as well.
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