The team behind Bahraini startup Eat had a solid plan when they launched in 2014, but when they heard a global player was about to enter the scene they were forced to change direction.
The original plan was to release a restaurant reservation app, dominate their local market of Bahrain, then scale to Dubai.
Their original plan was to spend the first three quarters of 2015 establishing their consumer restaurant reservation app and their table management system for businesses in the Bahraini market before beginning operations in Dubai in the fourth quarter.
Things were going well. They increased their market share to 75 percent in Bahrain.
Then in May last year India-based restaurant review platform Zomato, who already have a widespread presence in the MENA region, acquired US restaurant reservation business and table management platform NexTable as part of their global expansion. The Eat team knew right then and there they needed to act fast.
“This acquisition happened, forcing us to re-think our Dubai strategy, move there sooner than planned, and recruit a team,” cofounder Nezar Kadhem told Wamda. “That exhausted our resources and we had to fundraise in October 2015 instead.”
The fundraising didn’t go badly and to date they have raised a total of $700,000 since starting out, from Bahrain’s Tenmou and various angels in the region and in France. They previously raised a round of $300,000 in January 2015.
It’s now or never
They then had to hit the ground running.
“What were we going to do?” Kadhem had asked himself. “Dubai has always been our goal, our scalable option.”
So he took a decision to move even faster.
“We decided to move Eat to Dubai, to enter the market two months before Zomato.”
Operating out of the coworking space Impact Hub in Dubai, Kadhem began canvassing the food and beverage sector. By himself he visited 50 establishments, from chains like Emaar Hospitality Group and Jumeirah, to independents.
He discovered the market for in-house table management was fragmented.
Table management software is the online equivalent of a book that organizes bookings and where customers are going to sit.
“Most restaurants were still on pen and paper,” Kadhem said. “And if they weren't, they were either adopting the system their parent company was using (such as OpenTable) or using ReserveOut, ResPAK, or other small startups. There was no first mover, or market leader.”
This discovery brought about their next decision: rather than bring both of their services to Dubai they would hold back on launching their consumer facing app, Eatapp.co, and focus solely on the table management service (while having both streams still running in Bahrain).
Fragmented but competitive
Now operating in Dubai, OpenTable,whichwas founded in the US in 1998 and is arguably the world’s largest reservation app (their site says they seat 17 million people a month), is the biggest competition to Eat.
There is a range of options for looking up restaurants and reservations too. Even with DubaiCityGuide.com you can reserve online.
The F&B market in UAE is huge, and still growing.
In June 2015 Wamda covered the ‘aggressive geographical expansion in the Middle East and North Africa’ that ReserveOut had planned.
In 2015 a KPMG report estimated that Dubai's F&B sector would grow an average of four percent annually over the next four years - that’s about 1,600 new F&B outlets by 2019.
While Bahrain in comparison is small the market has been good for Eat to establish itself.
There are 61 restaurants in Bahrain signed with Eat for their consumer-facing app Eatapp.co. Of these, 40 are using their table management reservation system. They have 20,000 active users and have seated over 800,000 people with their consumer application.
Initially starting with one person on sales and another to cover the launch of the consumer app, they now have 23 staff in total - five in Dubai, five in Bahrain, nine engineers and another four admin staff.
Eat’s plans for devouring the market
“For the business to consumer market, it’s war,” Kadhem said. However, the fragmentation of the market leaves him feeling there is a gap they can fill. “No one is building tools to help the restaurants.”
In the four months they have been in UAE Kadhem said that they have acquired more than 50 restaurants for their table management service. Of these about 30 restaurants in the city host a ‘book now’ button on their website. This allows a user to immediately book a table.
This year they’re still looking to raise money, which is not surprising as entering Dubai earlier than expected threw up extra costs.
The worry for Kadhem now is that OpenTable would enter their Bahrain market. The company made rumblings in summer 2015 that they would look to open an office in Dubai within a year. “There’s a sentimental love for OpenTable,” he said. “If they came it would swallow up the market.”
But the notion of changing direction, or pivoting, is not a scary one for Kadhem.
“Being able to pivot and act fast is what helps startups gain advantage over the bigger, more rigid companies,” he said. So, if a global player were to shut down one of their services tomorrow Eat would immediately see a new market opening up. “We would definitely be willing to pivot if the market forces push us in another direction.”
Feature image via Branger, Roger Viollet, Getty Images.