SME Story: Interview with the founders of Chatfood

What inspired you to start this business?

Founded in early 2019, ChatFood was born to help hospitality businesses regain control of their relationship with customers, starting with their online business which has been monopolised by 3rd-party marketplaces. The company built an innovative mobile ordering solution to enable restaurants to sell from Instagram and WhatsApp (ChatFood has been awarded the WhatsApp partner badge) whilst connecting directly with their customers. 

Fast forward a couple of years, ChatFood’s offering has now been shaped into an omnichannel ordering and data-driven marketing platform integrated with exclusive social media integrations, over 100 POS partners, and premium logistic solutions (with an exclusive partnership with Careem). ChatFood is an omnichannel ordering and data-driven marketing platform for leading hospitality brands. ChatFood’s mission is to empower hospitality businesses to give their guests a seamless, personalised  and rewarding experience at every visit. 

Put simply, we believe that customers should have access to the most convenient way to order, regardless if they are first-time visitors or regulars. If they want to order food or drinks, they should be able to do so without having to struggle. They also shouldn’t have to wait 15 minutes to get their bill. 

ChatFood’s tech-enabled service solutions such as QR ordering and payment, group tabs, digital tipping, or dynamic loyalty programmes, powered by the ChatFood dashboard, empower operators to give guests more control over their hospitality experience, unlock higher sales, reduce operating costs, and provide their employees with a more rewarding work experience. Hospitality groups are always on a drive to find new ways to keep growing their business and delighting their guests while keeping costs under control and employees engaged.

What are some of the challenges you faced when starting off?

The sentiment towards tech within the hospitality industry is quite segmented. We’re lucky enough to work with innovators that believe that tech will enhance the hospitality experience and want to invest in their brand to delight their customers. But there is also part of the market that is quite reluctant to change and a bit intimated by technology. They tend to wait and see how consumers’ demands evolve but they risk missing the train and losing their spot to the competition. The change is already happening and will be quick, those who miss it will struggle to survive in the longer term.

Give us a business overview of your operations and funding.

ChatFood has already empowered over 3,000 hospitality venues across the Middle East to drive more than $100m in sales and convert more than 1 million visitors into direct customers, growing at an impressive 260 per cent year-on-year. ChatFood’s newly launched NFC/QR ordering system has been able to deliver outstanding results for its partners: 35 per cent higher average spend, 3x more tips, and 25 per cent more labour efficiency. This has allowed ChatFood to unlock revenue and margins at a time of surging food costs, labour shortage, and increasing commissions for hospitality venues.

ChatFood recently raised a bridge round of $3m led by Antler. This brings ChatFood’s funding to date to $7m after last year’s seed round led by leading regional VC funds BECO and Wamda Capital. The funds will be primarily applied towards setting up operations in Saudi Arabia, where the market is expected to reach over $25bn by 2026, as well as product development with the aim to unlock further efficiencies for restaurants, bars, hotels and entertainment venues.

What are your growth plans?

ChatFood growth will be supported by geographic expansion and the growth of our dine-in offerings. From a geographic perspective, we plan to expand into the GCC market which is a $45bn market that is expected to double by 2025. In fact, the UAE and Saudi Arabia account for more than 70 per cent of the market. ChatFood is already a market leader in the UAE and will continue its growth across the Emirates. The funds recently raised will also be used to set up operations in Saudi Arabia to unlock efficiencies for restaurants, bars, hotels, and entertainment venues. Qatar is also a growing market where ChatFood is getting traction, especially as it will host the next football World Cup this month. 

From an offering perspective, we’re planning to close 2022 with $100m AGMV and $325m by the end of 2023, which will be mainly driven by dine-in adoption with more than 50 per cent of the GMV coming from order and payment at table solutions. We are also expanding our 360 platform with add-on services for our partners to better attract, engage and retain their customers such as our plug-and-play Careem delivery integration, our exclusive WhatsApp and Instagram features, and our marketing service packages.