See the original story in Japanese.
Tokyo-based Toreta, the company offering a reservation and customer management platform for restaurants under the same name, announced on Friday that it has secured 1.2 billion yen (about $12 million) in the latest round. This round was led by Eight Roads Ventures Japan with participation from NTT Docomo Ventures and Mitsui Sumitomo Insurance Venture Capital as well as four existing shareholders: Femto Growth Capital, WiL (World Innovation Lab), iStyle Capital (now known as iSGS Investment Works), and Salesforce Ventures. Details of the shareholding ratios and payment date have not been disclosed.
In accordance with this, David Milstein, Head of Eight Roads Ventures Japan, will join the board as an external director.
Since launching the service in December of 2013, Toreta has seen a steady increase in the number of acquired restaurants, and as of September 2016 it has been introduced in some 7000 stores. Additionally, it is possible for participating businesses to access services from detailed table and seat management to online reservations for their restaurants. Merely by accumulating more users, Toreta has found additional business potential.
The company aims to use the funds secured this round to enhance their development system and to strengthen their sales and support marketing system.
To get down to it, from their founding period (no, even before that) I’ve kept an eye on Toreta as a favored reservation and customer database management service and now they have managed to fundraise over 1 billion yen ($10 million) in funding. With rumors floating about of an IPO within the next few years, perhaps their next large funding will come with the announcement of this.
Disclosure: A member of the author’s family has in the past had a contractual business relationship with Toreta.
While they continue to steadily acquire new stores, I was curious about their growth strategy for the future. With that in mind, I approached the company’s CEO Hitoshi Nakamura with a few key points.
First, what measures do they have to expand sales? With regards to the introduction speed of reservation and customer database management services Nakamura mentioned it’s proportional to sales force. Aside from this, they can increase numbers by offering additional services with the goal being to upsell. This is straightforward.
But what about the online reservation feature? One of the strong points of Toreta’s model is when restaurants receive a reservation (having until now used a paper ledger to record it) they are now able to to manage the status of their seating digitally. Consequently, it becomes possible to efficiently provide tables and seats to customers, ultimately contributing to the sales of these restaurants.
Recently, Nakamura said close to 20 percent of stores using their service support online reservations, and confided that this is also a growing trend.
We originally developed our service to solve the problem of managing numerous reservations for extremely busy restaurants, and we’ve acquired many contracts with ‘thriving businesses’ concentrating on reservations.
Usability, functionality, support, in every aspect our service have been optimized for these ‘thriving businesses.’ These businesses use Toreta with remarkable results, and from there news of us spreads by word of mouth. I believe our current expansion is a result of this.
On the other hand, restaurants typically require to use Gurunavi, Tabelog, Retty and other online restaurant review sites as a gateway to bring customers to their online reservation. Toreta is the only “reception” system connected to the restaurant side of seat inventory management, and for restaurants to accept customers it is essential to make use of such media sites.
With that, a question: I tried asking about the possibility of Toreta acquiring these types of media sites. First and foremost, Toreta can be thought of as a platform to assist restaurants from attracting customers to improving management. Regardless of the gourmet media sites, there exists a wide variety of service providers in the food-related IT industry, and acquisition can definitely be considered a stepping stone for private companies.
As a means for the expansion of our business, certainly I think acquisition is one of the choices. Not only reservations, but other business areas as well; not only Japan, but abroad as well. If there are partners that can share in our ideals from a variety of angles, we’d like to aggressively continue to increase such relationships.
He chose his words carefully while answering, but through Nakamura’s expressions I could feel just a hint of satisfaction.
Translated by Amanda Imasaka
Edited by Masaru Ikeda