The restaurant revolution — next level innovation
Restaurants were some of the first businesses to undergo digitisation “en masse” as a result of the pandemic. It forced the entire industry to rethink business strategies, operations and the way it serves its customers. Online delivery companies such as Doordash, Deliveroo and UberEats have been major beneficiaries of this shift.
With delivery companies eating away much of the margins (~30%!), many restaurants sought out their own solutions to manage their online operations while also exploring new revenue streams. For example, Flipdish and PepperHQ help restaurants build their own ordering website using low code solutions. The purpose of such solutions is to keep customers on a restaurant’s own website by incorporating third-party reviews, images, recommendations, and menu descriptions on the web page. With more time spend on the platform, the greater the chances that the customer converts while also enabling the collection of more data points to drive customer analytics. Of course, ultimately, the goal of online digitisation is to enable restaurants to continue to own the customer and customer experience.
Not withstanding all the excitement surrounding the massive potential of platforms like JustEat ($18bn), Olo (~$3.6bn IPO), and Chownow, the offline digitisation of restaurants is what really got our attention early on in the pandemic. While there are a plethora of companies in the market offering various solutions from offline order and payment solutions (e.g. Sunday), POS (e.g. Toast), to sourcing and procurement (e.g. Choco), we were keen to look for more vertically integrated solutions directed at full stack restaurant management.
In comes Nory…! Nory is an AI-based restaurant management system that allows its customers to manage full suite of the restaurant operations in one place (from staffing to inventory management), with predictive analysis to allow consistent decision making and consistent profit margins. In essence, Nory is a data science company that leverages on AI and ML to predict sales and costs. and empowers purely data-based decision making.
The solution is fully integrated with POS, payroll and accounting solutions
Why do we like it?
- Category-defining product that is highly differentiated — today restaurants have multiple tools (i.e. analytics, labor scheduling inventory management etc) that the teams typically spend 25–30 hours per week on to complete their work. Nory takes a radically different approach and aims to reduce the total time spent on operational tasks by up to 90%. This is driven by Nory’s leading edge AI and value generating algorithms that enables teams to spent less time on tools while achieving next level analysis, next level execution and next level ROI
- Clear value proposition is reflected in promising early traction — Nory’s data-centric approach along with its predictive performance tracking allows restaurants to stay ahead of the curve with demand forecasting, allowing restaurants to predict hourly sales within 90–95% accuracy. The product has been a great success with its customer base and on average delivers a 10–25% improvement on profits. The numbers don’t lie and Nory’s waiting list is long.
- Star team — highly technical with operator experience. We spoke to the founder, Conor, for 30 minutes back in September last year and we instantly knew we wanted to be a part of their journey. Conor used to be a quantitative trader and investment strategist before leaving his career in finance to launch Mad Egg, Ireland’s fastest growing independent restaurant chain — growing to EUR6m ARR and 90 staff within 14 months. He has a unique combination of skills — he’s a strong analytical operator who knows how to grow and scale a business. His Head of Engineering, Offer, was previously the Engineering Leader in Zalando’s Machine Learning division and has a deep understanding of how to productise ML models at scale.
- Large and growing addressable market — the global restaurant management software market is projected to reach $7bn by 2025, expanding at a CAGR of 14.6% during the forecast period (GrandView Research, 2021). Technology disruption in the restaurant industry and soaring need for restaurant-specific software such as billing and payment processing, inventory management, table management, and menu management are among the key trends stimulating market growth. Moreover, growing awareness regarding the importance of data analytics solutions in providing valuable insights to improve day to day operations is poised to provide an upthrust to the market. Important to note, restaurants can use Nory without having any preexisting solutions, therefore the total addressable market is likely much larger.
We are proud to be backing Nory! Thank you for giving us the opportunity to come along for the ride.