Japanese gourmet media startup Favy raises $9M, with 67M MAU closing in on big players

L to R: Kazuma Mori (Manager of Domestic Business Development Dpt. of Mynavi), Takumi Takanashi (CEO of Favy)

See the original story in Japanese.

Tokyo-based Favy, the Japanese startup behind a comprehensive food marketing service including gourmet media, has just announced that it raised 1 billion yen (about $8.8 million) from Mynavi, a Japanese leading human resource informaiton portal provider.

The two companies formed a capital tie-up and began cooperation in marketing service provision / recruitment business for nationwide restaurant chains. Specifically, Mynavi will introduce restaurant clients who are interested in recruitment to Favy, utilizing Mynavi’s promotion network consisting of 1,000 staffers and 60 bases all over Japan.

They are to jointly develop recruitment branding products that target restaurant users as well. At the same timing, Favy announced the launch of Favy Store, a service store for retailers.

Boasting 67 million MAU closing in on big players

It is newsworthy that Favy succeeded in this large-scale fundraising using an interesting business model, upon which we have been focused since this company started up. As borne out by the investor list consisting of a single company — Mynavi — Favy’s main purpose this time was business tie-up rather than money. According to Takumi Takanashi, CEO of Favy, the number of its staffer has been increased to 210 in which restaurant staffers account for half while its marketing system strengthened to 50 staffers.

Mynavi has not handled food-related contents previously so apparently was in need of a touch-point for its operational portfolio. Mynavi has restaurant accounts based on recruitment of part-time staffers and it is easy to understand that the firm aims to upsell by leveraging such business.

One aspect to scrutinize regarding this news is the increase in Favy’s business reach. Although a simple comparison is impossible with only 67 million MAU (monthly active users) announced this time, as for the status of the two key gourmet media players in Japan, Tabelog has 154.19 million monthly users with the total number of online reservations reaching 40 million (as of June 2018) while Gnavi has 65 million monthly unique users and a membership is 16.05 million (as of July 2018). Figures for both are quoted from their financial result documents for the third quarter of 2019.

Favy plans and operates showcase retailers

Favy’s Takanashi (left) with Seven Dreamers CEO Shin Sakane (right)

It is difficult to explain Favy’s business model. I had tried to analyze it in the previous round last year, but it does not remain in the same place as in the past. Its core service is Favy Page, the marketing package for restaurants. It is a SaaS (software as a service) model which provides various marketing functions such as introduction article published on Favy, listing advertisement agency, guarantee for no-notice reservation cancellations and customer management, charging 15,000 to 50,000 yen (about $130 to $440) monthly according to service plans. The firm has disclosed that 30,000 restaurant users are using this service, including those who using free plans.

In addition, the firm conducts a showcase-like business with real retailers as introduced before. The aim of this service is to develop business model for restaurants. The firm announced this September that it is going to establish a “co-working space for chefs” wherein their knowledge bases can be integrated.

Co-working space focusing on food business in Ginza, scheduled to open soon.

Favi Store, the new service announced this time, is also a part of the comprehensive marketing service providing chefs or companies who want to start restaurant business with know-how of restaurant management in the digital marketing era, such as automation of restaurant management, promotion, recruitment, business style planning, hardware purchase or choice of property. Takanashi called it PaaS (platform as a service) for restaurants. Anyway, the firm has acquired Big Data about what 67 million monthly users want to eat, as an entrance into the following services.

If its data tracking is combined with retailers’ visitor data including location or beacon information in the future, this service can likely become an absolute platform connecting readers and restaurants effectively. In fact, I heard ideas beyond that and will introduce it next time. In the Japanese gourmet media field, major players like Tabelog, Gnavi and Hot Pepper have long held dominance but it seems certain that Favy will gradually assert its presence.

Translated by Taijiro Takeda
Edited by “Tex” Pomeroy