Tock, the restaurant reservation software company co-founded by Chicago restaurateur Nick Kokonas (Alinea, Next, Roister, Aviary), just raised $7.5 million in a round of funding. Investors include venture capital firm Origin Ventures (backers of food delivery app GrubHub/Seamless); Chicago’s Melman family, of hospitality group Lettuce Entertain You Enterprises; NYC’s Eleven Madison Park operators Will Guidara and Daniel Humm; TV host Andrew Zimmern; and several other independent hospitality groups, according to a release.
Tock launched in beta in June 2015 following much hype. The system is designed to assist restaurants in managing a variety of bookings ahead of time, including standard reservations, private dining and events, and, most notably, pre-paid tickets. It's also pitched as a means of curbing no-shows and food waste. For customers, using Tock feels more like buying tickets to a show than reserving a table at a restaurant.
This new round of funding will reportedly help the company bring its technology to new markets and allow Tock’s developers to design new features for clients and diners.
Currently, 167 restaurants in 38 cities and nine countries exclusively use Tock to provide customers with a way to make a reservation. Many are fine dining establishments such as Thomas Keller’s The French Laundry, London’s The Clove Club, and Kokonas’s own Alinea. But with the support of Origin Ventures and high-profile chefs such as Zimmern, some are calling this new raise a sign that Tock could take on the current industry leader in online reservations, OpenTable. For context, OpenTable — which is valued in the billions and owned by Priceline — works with 37,000 restaurants around the world.
Kokonas has made no secret of wanting to disrupt the reservation space status quo. Tock compares its pricing and features with OpenTable directly on its website. Kokonas recently told the Chicago Tribune he felt OpenTable was vulnerable because it uses an "antiquated, janky old system."
"If you are using a 20-year-old system to conduct business in 2016," Kokonas told Eater, "you’re doing something drastically wrong." Anyone who has ever made a reservation on OpenTable and then received a confirmation phone call from a restaurant (who still answers their phone?) — rather than an email or text — can understand what Kokonas means when he speaks of restaurants needing to move into the modern age and let go of their embedded systems.
Meanwhile, other new reservation services such as Reserve and Yelp’s SeatMe are also vying for a share of the market. The good news for competitive services is that there are plenty of restaurants that are discouraged by OpenTable’s pricing (OpenTable charges a monthly fee as well as an initial set-up fee, plus other expenses).
Tock is unlike OpenTable in that it does not charge a per-reservation fee to the restaurant (OpenTable charges between $0.25 and $1.25 per reservation in addition to a monthly fee for software and hardware). Kokonas wants everyone to know that Tock is different from Reserve or SeatMe because every restaurant is paying a monthly fee to Tock for the use of its online app. Tock is not signing restaurants up for free as a way to beef up its portfolio; all 167 restaurants are paying customers. By the end of 2016, Kokonas tells Eater an additional 50 restaurants will be using Tock, and "by next year, the goal is to have 500 restaurants signed up and be doing $1 billion in sales."
Does Tock have what it takes to compete against OpenTable? It just might. "We believe that Tock is another transformational company in the restaurant industry," Origin Ventures partner Jason Heltzer said in a release. "Tock proved that ticketing works at Nick’s restaurants. Tock’s innovative booking methods and dynamic pricing capabilities have attracted all types of restaurants as customers."
• Nick Kokonas Wants to Challenge OpenTable After Tock Raises $7.5M [ECHI]
• Introducing Nick Kokonas's Ticketing System, Tock [E]
• Reserve Goes After OpenTable, SeatMe, With New Reservations System [E]