Tokyo-based Toreta, the startup that provides the reservation management system for restaurants, announced today it has raised 200 million yen (about $2 million) from Silicon Valley-based investment company WiL (World Innovation Lab).
Coinciding with this announcement, the company also unveiled that Kengo Yoshida, the former executive at Japanese internet giant GMO Pepabo, will join the board of management on July 1st. They will use the funds to strengthen their engineering and marketing forces.
Since its launch in December, the company has acquired more than 1,000 restaurants as users. The service’s monthly charge is 9,000 yen (about $90) a restaurant, so its easy to figure out how much money they are making every month.
According to the company’s CEO Hitoshi Nakamura, about 500,000 restaurants annually generate $226 billion in the Japanese restaurant industry. He said that the company will target the top 20% of restaurants in Japan, which will bring in revenue of about $98 million. But I think their investors will not be satisfied with this figure.
How do they evolve the restaurant business?
Many restaurants that use a conventional online reservation platform, like OpenTable, check a reservation book and manually input reservations to the online system. This process is time-consuming and can cause booking errors.
However, Toreta can check the status of table availability of participating restaurants using the platform and help them fill their vacancies by sending them customers in an efficient way. Nakamura explained:
We can manage the table availability of restaurants as our inventory using the system. In this way, we are more likely to receive reservations through foodie websites and send them to the restaurants. We are planning to develop an API to integrate with marketing websites (such as Tabelog or Gurunavi).
Because many competitors are targeting this market, Nakamura understands that the company will have to acquire the top spot within a couple of years to survive. The company has been steadily acquiring users, but they invited Yoshida to join the team to strengthen their online marketing strategy. Yoshida told us how he will proceed:
Our revenue is still dependent on the efforts of our sales representatives. But we will explore what to do for our online marketing from now. But people working in the restaurant industry can be very digitally challenged. So we may need to make offline efforts as well.
It will be interesting to see how the company will evolve the restaurant business with the digital technology.
Disclosure: The author’s wife has a business relationship with Toreta.