It’s a crowded space with high-profile stories of both success and failure – now a new start-up, HeyMenu, is planning to enter London’s unpredictable food delivery market, starting on 1st December.
HeyMenu say that their proposition “is to provide up to 90% lower costs to takeaway restaurants than competitors, including zero commission”.
The start-up are also offering “more personalisation and dependable technology that ensures orders are not dropped, payments are secure and reliable and deliveries are tracked from restaurant to the front door.”
The company say that they are onboarding 500 new takeaway restaurants per week with a limited marketing spend and are on track to reach a target of 10,000 restaurants onboarded before the full consumer launch in December.
HeyMenu’s CEO Chris Howard says: “we have been watching, learning and researching for a while and have identified a number of significant advancements that could be introduced within the industry.”
He goes on to suggest that the large percentage fees charged by platforms such as JustEat, the LSE listed food-tech start-up that began in Denmark a decade ago and is now valued at more than £1.5bn, and Hungry House, who appeared on Dragons Den in 2007 and won investment from Duncan Bannatyne and James Caan, before the deal later fell through, are unsustainable and should be passed back to the takeaway restaurants.
“We want to offer a more rewarding and provide unique, personalised options for those who love good food.”
HeyMenu believe that if the restaurants retain most of their profits they can be re-invested into the business which results in “an enhanced quality of service to consumers.”
They say they have already met with “unprecedented demand” and have therefore “substantially increased the contact centre staff and employed our own face-to-face sales force, along with direct online sign-up.”
HeyMenu are also offering a full money-back guarantee to all restaurants who sign up to the service if they do not save money within their first six months using the service.
HeyMenu charges no commission to restaurants, opting to charge them £15 per week instead – £65 per month, regardless of whether HeyMenu gives them £1,000 worth of orders each month, or £10,000.
There is also a “small, one off signing fee” of £249, according to the company website., which HeyMenu say is the cheapest of any comparable service, and also includes an ordering portal and a printer.
The company website also indicates that HeyMenu has a “multi-million pound marketing budget to get people flocking to our site and your restaurant.”
Compared to a typical charge of £750pcm, based on HeyMenu’s research, an equivalent charge of just £65pcm represents a 90% saving.
The HT recently spoke with a founder who ran a successful food delivery start-up in London which had raised more than £1 million but in the end, unfortunately was forced to close its operations.
The hardest part about it, he said, was micro-managing 3 different businesses at once – the cooking, the ordering, and the logistics of delivering the food.
It looks like Hey Menu will only have to worry about two of these issues as they are not cooking the food themselves, but client relationships will surely play a big role as they look to eat into established businesses’ market share.
It sounds like they are doing a good job of signing up restaurants – will the marketing campaign make the difference with new customers too?
Matchmaking – putting people in touch with products and services and delivering them to them is probably the internet’s biggest ever business win and the foundation behind so many of London’s most investable start-ups.
It will be interesting to watch out for the HeyMenu marketing splurge, presumably beginning in December. As ever, they will sharing ad-space with many of their main rivals, who are already advertising all over the city.
It looks like the rise of food-tech and home delivery will also have a significant effect on the numbers of workers signing up to be part of the “gig economy” – at least until the drones and autonomous cars arrive.