FAQ for Investors

Problem Overview & Unfair Advantages

What is the problem Restaurants Club is trying to solve?

Restaurants miss often a key business process step: marketing. They have often great products (their chef are amazing product people), and also the sales team rocks (the waiters). But in the middle, marketing is missing.

It’s 2023 and it’s still a pain for Restaurants to control Customer Journey because Marketplace owns it; to outstand from the crowd, because they rarely know how to reach their ideal customers; to face unfair competition, where they cannot win against brute force owned by the large food chains.

The restaurant is right now not a sustainable business: only knowing how to enhance offerings and business allows the restaurateur to have higher margins, use higher quality raw materials, and support a healthier and more sustainable agricultural and food supply chain (from sowing to harvesting to distribution), pay collaborators adequately, and bring a positive spiral to the HoReCa sector.

Moreover, we see that the world is losing an irreplaceable gastronomic heritage as independent restaurants fail to market sustainably and effectively: this heritage is being substituted with the standardized offerings of large food chains. 

Our mission is to support all restaurant activities by enhancing their unique way of creating, interpreting, and spreading the culture of the food and beverage industry. Our main goal is to stimulate and support the entrepreneurial culture of SMEs by democratizing Customer Acquisition and Retention Technologies. 

Why is now the right time?

At this crucial juncture, several market forces have converged, creating a unique opportunity in the restaurant industry. Rising inflation is exerting pressure on businesses to increase efficiency and customer retention. Moreover, the burgeoning trend towards premium positioning is causing a surge in demand for personalized experiences and seamless service across all customer touchpoints, both online and offline. At the same time, increasing fees from platforms like Grubhub and JustEat are fuelling dissatisfaction and driving users and restaurant owners to seek superior alternatives. 

The COVID-19 pandemic has catalyzed digital transformation in the restaurant industry, but many businesses are struggling to fully leverage these new digital platforms. Our SaaS solution is tailored for this moment. It offers restaurants the tools they need to optimize their digital presence, improve customer experience, and embrace the premium positioning trend. 

Three years ago, digitization wasn’t a pressing need. In contrast, a year from now, the landscape may drastically shift with potentially heightened competition. This unique confluence of factors makes the present the opportune time to invest in our solution, which is poised to help restaurants navigate these challenges and capitalize on the emerging opportunities, ensuring an optimal return on investment.

Do we have a scientific breakthrough, intellectual property, business-model innovation, or a unique partnership?

Restaurants Club is positioned at a premium level in the marketing world, where marketplaces represent the value bracket and creative agencies the luxury bracket.

The platform is totally self-service, although the user can count on specialised customer support. Restaurants Club achieves this level of automation and scalability through software automation and AI. Restaurants Club’s AI models are totally proprietary or fine-tuning proprietary sovereign models recognised as the most efficient in academic and business fields: this, in addition to the intellectual property of the platform, gives a very high defensibility to the business. 

The Restaurants Club business model is also innovative: we offer a subscription model with marketing budget included in a market that offers percentages on sales and therefore makes customer acquisition non-scalable, or fee-based contracts without marketing budget included – an indispensable part of the marketing process. In addition, Restaurants Club aims to enter into partnerships with cash management systems, autonomous last mile delivery systems and creative agencies, so as to integrate as much as possible into the market ecosystem and be able to give the restaurateur the best possible service. Each of these players benefits from an integration with Restaurants Club, and Restaurants Club benefits from integrating them. 

Cash management systems collect a large amount of data on the customer, which Restaurants Club is able to automatically and reliably transform into clear forecasts for the restaurateur, from a marketing and non-marketing point of view: the system uses this data to draw up a clear profile of the buyer persona, to enter it into the Customer Data Platform within the platform and to generate upselling and loyalty opportunities; for these reasons Tilby (a Zucchetti company), decided to start an integration with Restaurants Club. Autonomous last mile companies, such as PonyU, are able to complement their service with Restaurants Club, which integrates them to be able to give the restaurateur a real alternative from marketplace platforms even if they do not have their own riders.

Finally, creative marketing agencies are able to scale their process – adding premium support to the restaurateur – and thus increase their margins.

What economic or market benefit will Restaurants Club convey?

Restaurants Club will be able to develop restaurants independently, allowing them to enhance their way of interpreting the food and wine culture of the place and thus making consumers aware of the restaurants’ offer: tourists will be able to have the same advantages as locals, locals will be able to develop a healthy two-way relationship with your favorite restaurants. This will allow the restaurant to be able to cultivate the lifetime value of its customers and increase revenue and financial stability.

What is the scientific or business model innovation we bring?

Restaurants Club is the first the restaurant’s plug and play AI as marketing team
It cares about the whole marketing funnel steps (Attract-Convert-Fidelize) within specific tools for each phase, AI-powered to reach the highest personalization level (example: account based marketing within automatic AI-wrote email to customer using his ordering data), self-service and inside a SaaS.

How far is this from commercial scalability?

The product includes automation at every stage of service delivery, from contract signing to customer care. Specifically, for example, the following have been automated:

  • the automatic creation of the web-app through a wizard process
  • the updating and management of the restaurateur’s touchpoints with the customer
  • the reservation and delivery channels
  • the creation, management, and optimization of multi-channel marketing campaigns
  • the automated account-based marketing, integrated with artificial intelligence. 
What risks remain to be proven? What are the three major things that could go wrong?
  1. If self-service could bring 100% Product Lead Growth and not a hybrid model like now it is. If this will go wrong, Restaurants Club will be less scalable.
  2. If the solution will be successfully integrated into Restaurants’ typical daily activities at various levels. If this will go wrong, we need to focus on Education and Academy.
  3. If the CPM/CPC and other marketing costs will spike. If this will happen, we should focus on the best revenue/cost marketing channel and automate it.

Founders & Team

Who are we as a founder, and why are we qualified to lead this opportunity? What skills or approaches do we bring to this problem? 
  • Piermatteo brings 5 years of experience as a Marketing Manager in the food & beverage industry to the table, having managed dozens of restaurants in the Baladin group. 
  • He previously founded a marketing agency with Andrea Antico, our CFO. Andrea holds a Ph.D. in Economics from the Superior School Sant’Anna in Pisa and has been recognized as one of the most brilliant economics students in Italy.
  • Elisa, our CMO, has a Master’s degree in Marketing with a focus on digital marketing from LUISS Business School, the most prestigious business school in Italy. She brings her prior startup experience as a B2B Sales and Marketing Manager to our team.
  • Our CTO, Pablo, has 16 years of experience as a developer and has held previous CTO positions in startups.
  • Andrea, our Sales Manager, has been recognized as being among the Top 10 Salespeople and Top 30 Team Managers in Italy, with 13 years of experience in Sales.
  • Lastly, Roberto, a co-founder of CVC capital partners Europe, is our main investor and a part of our team
What technical skills will our team need to add?

In order to meet our goals, we need to bolster our customer care and sales teams in terms of personnel numbers. Additionally, increasing seniority within our technical team is crucial. We also need to introduce a technical role that can directly liaise with customers to gather feedback and identify opportunities for technical improvements based on customer insights.

Who else is working on Restaurant Club?

The Restaurant Club team is a diverse and dynamic group working across various aspects of the project. Here’s a breakdown of the team composition:

  • Full-Time Team Members: 25 individuals working on core functions.
  • Part-Time Team Members: 9 individuals contributing in various capacities.
  • Executive Team: Fully based in Pisa, steering strategic decisions and operations.
  • Remote Work: 50% of the Restaurant Club team works remotely, leveraging technology and flexibility.
    • Specialized Teams:
      • Product Team: 15 members focused on product development and enhancements.
      • Data Science Team: 5 specialists analyzing data to drive insights and innovations.
      • Marketing Team: 5 professionals working on brand positioning and outreach.
      • Sales & Success Team: 5 members dedicated to sales growth and customer success.

The combination of diverse skills and a distributed work model ensures that Restaurant Club can adapt and innovate in the fast-evolving restaurant industry.

Are we all working toward mitigating our primary risks, or are we working on non-critical development that can be addressed later?
  • Product Team: Focus on stabilizing the product to minimize technical issues, reducing the risk of losing customers (churn rate) due to flaws or shortcomings.
  • Customer Support Team: Actively support and motivate customers in their use of the software. By highlighting immediate benefits, we aim to lessen the risk of customer loss due to perceived lack of value or insufficient return on investment.
  • Marketing Team: Our approach includes supporting the sales team with a go-to-market strategy in Italy and internationally. We are actively working to build trust in our new brand and to establish it as an industry benchmark.
  • Sales Team: We strive for rapid user growth to bolster our go-to-market strategy, sustaining investments through increasing sales cash flow. The overarching goal is to reduce the cost of customer acquisition, thereby shortening the time needed to reach the break-even point (BEP).

Milestones & Financials – Risk Reduction

What are our future milestones, and how much capital will we need to achieve each?

The aim of the financing is the scale-up of Restaurants Club in the EU (Italy, France, Germany, UK, Switzerland) and in the US. The first milestone is to have a solid users’ base in the markets of interest, and hence to get 1.000 users in the various markets (In 16 months from the launch in the market, both for the EU case, and for the US case). The second milestone is the financial BEP, at about 60 months in the EU and 44 months in the US. To reach the first milestone we need not less than 7.5M€ for the EU market, and not less than 4.8M$ for the US market. To reach the second milestone instead we need not less than 6.5M$ for the US market, and not less than 10,9M€ for the EU market.

What is the company status and burn rate at each of these milestones?

At the first milestone, the net burn rate is 4.28%, while the gross burn rate is 7.55%. At the second milestone, the burning rate in absolute terms is 1,8M

How far are we from being cash flow positive, in terms of both time and money?

Our Business Plan forecasts that we will achieve positive free cash flow after 36 months. The exact timing and net cash flow value will vary by country, with the average yearly profit rate calculated over a 10-year period as follows:

  • Italy: Positive cash flow by month 31; 38.62% profit rate.
  • Europe: Positive cash flow by month 37; 34.01% profit rate.
  • USA: Positive cash flow by month 26; 48.76% profit rate.

More detailed information can be found in this report.

What are our contingency plans if things don’t go well? What happens to our financial needs if technology or market development slips, or costs are too high?
  1. technology dev slip: In the event of a technology development delay, we are in a strong position due to the advanced state of our product. It already offers more features than our competitors, meaning that even in a potential delay, we’d still be ahead of the competition.

While the lack of additional features could temporarily impact customer acquisition or increase the churn rate, it’s important to note that our existing functionality is robust enough to solve the problems restaurateurs face. Any extra features we’re developing are essentially “nice to have” but not critical for delivering value to our customers.

If there are technological issues with our main features, the modular design of our SaaS product can limit any malfunction. Each module can operate independently, reducing overall system disruption.

Moreover, we have experience in quickly addressing technical issues. Urgent fixes can typically be resolved within a few hours, while more significant problems can take a few days. Our past experience with handling various fixes of different levels of urgency has shown us that we can effectively manage and mitigate such issues.

  1. Market dev slip: In the event of a market downturn, our sales metrics could potentially decline. However, our sales team has consistently demonstrated its ability to swiftly adapt to various market conditions. Moreover, from a product perspective, we are open to partnerships and integrations that could speed up our adaptation process. We have already established four active integrations.

While our service is particularly suited to address urgent issues in the food and beverage industry, it’s designed to cater to a broader range of small to medium-sized businesses. This is because the problem we solve is common across sectors.

Our adaptability ensures that we can respond promptly during periods of market instability. While this process might temporarily increase our capital needs due to a sales reduction, it’s crucial to highlight that our sales will not cease. They might decrease, but the versatility of our service, our team’s experience, and our strategic partnerships position us to manage such challenges effectively as we strive towards restoring market balance

  1. Increase in costs: In the event of increased supply chain costs, the number of customers needed to reach our break-even point (BEP), as well as the time to achieve it, would be affected. However, it’s crucial to mention that our per-user costs are low, thanks to our ability to spread costs across multiple users. Given our large customer base, the impact of a cost increase would be relatively mitigated. Notably, if our supply chain costs were to double, this would lead to approximately a 5% decrease in user margins after the third year.

While adjusting our pricing could be a potential solution, it could also delay the attainment of our BEP. We’d like to underscore that we cannot conclusively predict these outcomes, but we can assure that we’re poised to take decisive, data-informed actions as real-time situations unfold.

What would make Restaurants Club run out of cash, and what does the worst-case scenario look like in terms of cash flow?

The reasons that may make RC run out of cash are either directly imputable on us (internal), or external and uncontrollable (external).

On the internal side, we mention the churn rate and the sales metrics. The first strongly depends on how the product performs and from the customer care we are able to give. The latter instead depends on how the product is perceived, how the sales department is able to explain the value of RC, and also on how fast it is in adapting whenever there is a change in market development (point B).

On the external side, excluding all the geopolitical, sanitary, and in general any force majeure motivations, attitude and habits of the potential customers are worth mentioning. These effects are fundamental, and changes in the habits or routines of restaurateurs must be analyzed on a case-by-case basis, with solutions found depending on the situation.

The Market

What opens up the segment market to us?

The segment opens up to us due to a substantial market gap in the restaurant industry’s marketing solutions. Several factors contribute to this opportunity:

  • Decline of Marketplaces: As fees rise on both business and user sides, dissatisfaction grows, leading many to leave these platforms.
  • Premium Positioning Trend: With inflation causing restaurants to raise prices, there’s a need for a well-crafted customer journey to support a shift toward premium positioning.
  • Limited Access to Marketing Agencies: These are often considered a “luxury” solution, accessible only to large chains.

Moreover, the increase in delivery platform fees and inflationary pressures have caused a need for proprietary touchpoints and driven restaurants to seek alternative solutions. While COVID-19 has accelerated digitization, many small and medium-sized enterprises (SMEs) in the industry have been unable to fully seize its potential. Our approach aims to bridge this gap by offering tailored, satisfactory solutions that align with the current trends and challenges.

How significant a step forward is represented by our technology or innovation?

In the current landscape of 2023, many sectors have seen significant technological advancement, yet the restaurant industry still faces considerable challenges in adopting effective marketing automation. This disparity is more than just a temporary inconvenience; it has real consequences for efficiency, customer engagement, and profitability. Our technology and innovation represent a substantial step forward by directly addressing these pains. By providing targeted, user-friendly solutions that are specifically tailored to the needs of the restaurant industry, we aim to transform these ongoing challenges into opportunities for growth and success. The impact of our technology isn’t merely incremental; it marks a paradigm shift that can redefine how the industry operates and thrives.

 What impact will it have on the competition?

We will establish a unique position in the market that serves as a third option between traditional marketplaces and agencies. This will force the competition to narrow their focus, concentrating on specific niches. As a result, they won’t be able to broadly claim that they create genuine customers or demand, but will have to admit they only generate orders.

Why can’t a competitor replicate our plan tomorrow?  Why have other players in the field missed out on the innovation?

Our unique edge lies in several factors:

  1. Intellectual Property: We hold exclusive rights to our intellectual property and proprietary AI models.
  2. Tailored Business Model: Our offerings align seamlessly with our business model, unlike competitors’.
  3. Economic Disincentive: For competitors, the costs of imitating our strategy would surpass potential benefits.

Specific industry nuances further cement our position:

  • Marketplaces: Their revenue model emphasizes maximizing order volumes. Consequently, they don’t prioritize owning the entirety of the customer journey as we do.
  • Creative Agencies: Their focus is on a few high-value clients. While they might benefit from a scalable, low-ticket solution like ours, they opt for tools like Shopify or Mailchimp instead of building their systems from scratch. This is the reason we’ve introduced our partnership program tailored for them.
  • Restaurant-focused SaaS Competitors: Their primary aim is restaurant management and loyalty programs. Our system, on the other hand, offers an integrated data flow. While they might attempt integrations with promotional tools or machine learning systems, these often come off as tacked-on features that don’t align with their primary mission.
Who are 10 ideal customers who will make your company successful?

Ten restaurants, distributed across our target countries, with the following characteristics:

  • Strong local network
  • Ability to make referrals and exert influence
What are the threats that could make the market opportunity obsolete?

A high level of digitalization and automation, even in small businesses, and a high level of entrepreneurship (in the sense of entrepreneurial knowledge) prevalent in small businesses as well.