Restaurant mortality is a reality with many businesses dying young. What if technology could help change the way restaurants are run by providing deep insights for better margins? Enter Bengaluru-based EagleOwl, a cloud-based restaurant management solution that focuses on improving the bottomline and back-of-house efficiency.
Founded by Vinodh Rajaraman in 2018, the SaaS startup takes into account all aspects of managing a restaurant. These include inventory management, food and beverage costing, purchase orders, table management, billing system, point of sale, supplier management, cost tracking, food costing, menu management, and reporting/analytics.
The idea was conceived when Vinodh was heading operations for a full-stack foodtech startup in Bengaluru, and saw first-hand how mismanaged, unscientific, and unorganised the segment was.
“Most restaurants don’t know what it costs to make a dish; their pricing is unscientific and arbitrary, leaving money on the table on each sale. Food cost is roughly 25-30 percent of sales, with other fixed expenses and ingredient costs adding up. Making money is really tough in this business. Restaurant owners don’t know what should have been their expected cost of sales, so there is no baseline to start inquiry on actual cost of sales,” Vinodh says.
“We help restaurants identify the variance at a granular level to optimise their purchases, price the menu right, and improve their efficiency and bottomline,” he adds.
How does it work?
While most tech companies in the restaurant space operate front of house (FOH), this startup operates entirely back of house (BOH) as “that’s where most of the analytics are needed to price a service effectively”.
Vinodh, a graduate of BITS-Pilani, believes a restaurant inventory system is useless without recipes.
“We encourage our clients to start with recipes. We can then tell them what they should be spending, and that they should track what they have spent and on which items. Our product helps owners track and automate key parameters, such as food cost, variances, price fluctuations, and impact on gross margins, on a daily basis.”
The founder worked with the likes of Huawei and Cisco before working for a food startup. He decided to take a break in 2017 and began work on EagleOwl.
EagleOwl is a B2B product; the tech was built on Djangoo/Python. Vinodh’s main aims were to help restaurants lower food costs (by tracking every single aspect), streamline processes, provide actionable insights, and increase profitability (through menu engineering, recipe consistency, financial tracking, and reduced manual effort).
Getting started and creating a niche
EagleOwl’s first client was Windmills Craftworks, a Bengaluru-based restaurant. The owner asked Vinodh to prove that the product worked; he said he would pay only after that.
The two-month pilot involved data entry, cleanup work, and coordinating with staff to collect data. Soon after, Vinodh showcased the power of the tech and the owner was extremely happy.
Vinodh recalls he was told “take whatever you want from finance” when he asked for payment.
The founder, who made a personal investment, says he spent three years building the product. He has also raised an undisclosed seed round.
Vinodh says sales are tough, particularly for SaaS and with restaurants “known to not pay on time”. He lists educating restaurateurs on importance of data hygiene, recipe-based inventory control, and training as major challenges.
“Initially, many said we would never be able to sell an inventory solution without a POS, but 95 percent of our customers are pure inventory users. Also, there were question marks on pricing as we were selling the inventory solution at 4-8X of competitor pricing, but we were able to create a niche by generating value for our clients,” he says.
EagleOwl makes money by offering monthly, quarterly, or annual contracts along with one-time on-boarding charges. The founder refused to disclose pricing details and revenue since this is the company’s first year in business.
The company already has more than 20 customers. Toit is one of the bigger brands that has signed up with EagleOwl. Other clients include Arbor, Bier Library, Aurum, Brew & Barbeque, Bier Garten, and Red Rhino.
“We have one client in NYC along with restaurants like Chianti, Happy Belly Bakes, and Manis’ Dum Biryani. We also have a Chennai-headquartered large, multi-chain brand as our client,” Vinodh reveals.
The market and way ahead
According to Mordor Intelligence, India’s foodservice sector is “one of those vibrantly growing markets that has seen exceptional growth during the past decade and continues to expand rapidly during the forecast period”. It is forecasted to reach $95.75 billion by 2024, registering a CAGR of 10.3 percent during the forecast period (2019-2024).
The restaurant management startup competes with others like PayTouch, Shogo, and Cohesion. However, EagleOwl stands apart by working back of house and connecting all the dots in the supply chain as compared to other companies that mostly capture sales data.
What’s in the future for the founder and his startup?
“Keeping customers happy is always our top priority. From a business angle, we will strongly focus on restaurant chains and expand to other cities,” Vinodh says.
(Edited by Teja Lele Desai)
Source: Thanks https://yourstory.com/2019/12/bengaluru-based-saas-startup-eagleowl-restaurant-management