Earlier this week, Wix announced it was stepping deeper into the important restaurant and food vertical. The Israeli-based company will power up its offerings for restaurants by pulling Miami-based SpeedETab into its ecosystem. The acquisition will bolster Wix’s efforts in the dining sector via its Wix Restaurants play.
So a bit more about SpeedETab. We turned to Crunchbase to learn that the company was co-founded eight years ago by Adam Garfield. Garfield was just four years out of the University of Florida when he launched the company. According to Crunchbase, the company has taken just $650,000 in a 2016 seed round. To us, that suggests the company’s founders and investors could earn a decent exit. This depends on the terms of course.
While we have followed companies such as Toast, Upserve, and SliceLife for some time now, we had never come across SpeedETab. While the company name may be a bit of a tongue twister, the mission seems well-intended. According to the founder’s LinkedIn, SpeedETab is “about helping brands create better customer experiences, drive revenue, and strengthen brand through tech.” According to the company’s website their software powers 600 locations, in five countries and have processed 5 million orders.
An Easy Way into the Restaurant Vertical?
To us, it seems like this deal probably was an inexpensive way for Wix Restaurants to gain an additional – tiny albeit – foothold in the sector. That SpeedETab was already in five countries suggests that they found the competition in the U.S. too fierce and ventured into Latin America as a path to customer acquisition.
We do not mean to minimize what Garfield has done with just $650,000. We’ve seen plenty of start-ups burn through that amount of money in a matter of months.
We’ve wondered about Wix’s ability to continue to grow at a record pace without some verticalization of their software. We frankly had not known that Wix even had a practice area focused on the restaurant space.
According to the press release, “Wix Restaurants is an all-in-one professional solution which allows restaurant owners to create an online and mobile presence, provide menus, take online orders and reservations, and receive payments.” It is certainly a smart move by Wix to dedicate a team to the restaurant industry. For years as we’ve covered the local space, the restaurant industry has always stood separate from the other categories of home, professional and personal services where one software platform can be leveraged across a number of key verticals.
The COVID Effect
Wix’s focus on restaurants is probably more driven by the pandemic than by any broad strategy established pre-2020. In the press release, the company acknowledged that restaurant sign-ups grew from hundreds to tens of thousands over the past two years.
Ronny Elkayam, SVP Strategic Products at Wix had this to say. “It’s more vital now than ever for restaurant owners, from small, local, and family-run, to fine dining and multi-locations to optimize their services with a strong, reliable online presence. We’re excited to bring the online expertise of SpeedETab to join our mission of providing the best online platform for restaurants. Wix Restaurants is already the leading industry solution. And now our combined platform will provide a high-value product for the new era of the restaurant industry.”
We’d think Garfield must be breathing easier. Wix has the resources needed to ramp up his vision and reach millions of new restaurants. He suggests as much in his comments in the press release. “We are thrilled to join the Wix Restaurants team and provide an amazing solution for restaurants around the world.”
We’re eager to see how Wix’s restaurant play matches up against Toast and others like it. Toast is aiming for an IPO later this year with a potential valuation of $20 billion. That valuation must have raised eyebrows at Wix. And it probably made the SpeedETab transaction easier to complete. We’re also wondering if Wix will launch other verticals within their ecosystem. We have always believed that there’s a very fine line between being a horizontal play and a vertical play. Time will tell for sure.