Two former Rocket Internet executives are out to beat Foodpanda, the food delivery startup backed by the German incubator-cum-investor, at its own game — and they’ve raised $800,000 to get to it.
Hong Kong-based Caterspot was founded in January of this year by Camilo Paredes (its CEO and former MD of Foodpanda in Latin America), Amanda Ernst (its CPO and ex-COO of Hellofood Latin America) and Andrew Ng (its COO and formerly with HSBC Australia). This funding round, which was led by Triplestar Capital with input from Swiss Founders Fund, is aimed at building out its operations in Hong Kong and Singapore, its two markets right now.
Rocket Internet has essentially bought itself a monopoly on food delivery in many parts of the world. Last year, it bought equity in Delivery Hero and swallowed up no fewer than nine other startups. It hasn’t stopped there, shipping out and bringing in new businesses since then to consolidate its empire. Despite that, Caterspot’s founding trio see some gaps that can be attacked in Asia.
Principally, Caterspot is focused on the B2B, or business customers, rather than serving consumers as Hellofood, Foodpanda and others do.
With some 150 caters on its platform, and 50 more joining imminently, Paredes explained to TechCrunch that the company is scaling carefully to build loyalty among users and a sustainable model.
“80 percent of our sales come from corporates, and we’re crafting our platform to make it very easy for secretaries, offices managers, receptionist, HR, etc to order food for their teams. After speaking to many companies, we see there are a lot of pain points and no solution that meets their needs so far, including platforms like Foodpanda’s corporate accounts,” he said.
Foodpanda does offer a business service, which is rolling out across Asia. At the launch in November 2015, Foodpanda co-founder and CEO Ralf Wenzel told us that there’s a huge opportunity in Asia, with the typical order size of businesses far higher than consumers, and plenty of repeat business. Caterspot CEO Paredes sees the same potential.
“We never take on orders that are less than 10 people and so far we’ve realized that once a secretary or office manager discovers our platform, they love being able to have many options and information at their fingertips. We’re very pleased with our low churn rates,” he told us.
It isn’t just about typical restaurants coming online. Caterspot includes some quirky options, like a popup bar which might be suitable for events or a company do.
On the business side of things, we know that food ordering is challenging. The unit economics are stacked against many businesses ever pulling in a profit, while the customer experience is hugely dependent on third-parties who can control the quality of the final product and delivery time.
Paredes didn’t say if the business is close to unit profitability (the buzzword of 2016 for delivery companies), but he believes that healthy commissions and keeping costs low will help Caterspot “become profitable in each city we launch within a reasonable amount of time.”
On the subject of launches, he said that the company is locking down its business model and blueprint in Hong Kong and Singapore — two bustling and Westernized cities in Asia — before moving into new locations.
“Next year, users will definitely be able to use CaterSpot in several major markets across Asia and Australia,” Paredes said. “We plan to raise [funding] again this year to help fuel our expansion.”