CityMunch brings together restaurants and diners, solving a problem for each. For restaurants, our platform tackles underutilised capacity during quiet times of the day; for consumers, our mobile app is the simplest way to save money on dining out.
Our platform allows restaurants to connect with diners in real time, attracting people when they need them most. They can use it to create and manage a weekly profile of offers that precisely target key times - e.g. from 6:00 to 7:30 on weekday evenings. The calendar interface makes this easy, and can be tweaked at a moment’s notice to respond to changes in demand.
These offers are published in real time to our consumer mobile app, giving consumers a wide choice of deals around them. CityMunch vouchers are just flat percentage discounts off the food bill, keeping things simple for customers.
Recently, as part of London Food Tech Week, we won a pitching competition to become the first of five start-ups on Just Eat’s inaugural Accelerator program, and intend to draw on their expertise and network to reach our full potential.
CityMunch aims to revolutionise the relationship between restaurants and diners. Empty seats are an enormous problem in an industry with high overheads. With the typical margin on food being 65-70%, there is room to move in the price at certain times. CityMunch reflects this in a way which makes things easy for nearby consumers, and flexible for restaurants where necessary.
The impact of doing things this way will be seen by:
By connecting time-specific offers directly to consumers looking to eat at that time, CityMunch enables restaurants to fill more seats more of the time, increasing profits. They can also use it to reduce waste, discounting fresh food at the end of the day rather than throwing it out.
Price flexibility favours independent restaurants with an instinctive feel for their local market and ability to react to changes. Higher profitability can create a larger, more independent-led food scene, meaning more employment and more choice for consumers.
Substantial accomplishments to date
CityMunch is live and being used in Central London, having launched in Shoreditch in February 2016. The app was designed and built in late 2015, after extensive consulting with both restaurants and consumers. It was beta-tested in conjunction with UCL's Digital Business Labs throughout January prior to the full launch in both the Apple and Android app stores.
Over 250 restaurants, cafes and eateries have signed up to the platform so far throughout Central London, with more signing up every week. Over 7,000 consumers have downloaded the app.
The response on both sides of the market has been very positive, with bloggers writing about their experience with the app, and restaurants appreciating the effect it can have on their business. Restaurant clients include well-regarded London chains such as Busaba Eathai and Hummus Brothers, as well as high quality independents such as The Chancery and Pachamama.
CityMunch’s business model is focussed on growth. We operate a “freemium” pricing model for restaurants - charging them once we’ve had a meaningful impact on their business. This allows us to form long-term relationships with restaurants, making sure the offers are as good as they can be for consumers, which in turn leads to more value being created for restaurants.
Every restaurant that signs up with our platform is entitled to 30 free covers - beyond that we charge 50p per cover. As we generate critical mass in strategic locations, we expect to be able to develop solid market position, and become a high-margin business.
Use of proceeds
Growth is our primary focus. Funds raised through Seedrs will help us in reaching critical mass.
London expansion: Our 250 restaurants are all based in Central London - a great start, but we need to continue growing our offering and get the word out to more consumers. Seedrs funds will enable expansion on both these fronts.
Geographic expansion: Our national strategy is to build out from student-focussed launches in key UK cities, including Bristol and Edinburgh.
Consumer App: Seedrs funds will enable us to perfect the user experience of the app - creating a slick, seamless app which consumers will proudly share with friends.
Merchant App: We believe that our analytics platform has enormous potential. Due to the quantitative characteristics of CityMunch offers (time-based % discounts), we’re able to provide real insight into local consumer behaviour.
Voucher Distribution: We intend to partner up with other services (e.g. tourist apps) to act as other distribution channels for our vouchers.
Almost everyone has a restaurant they would visit (or visit more often), if only it were a bit cheaper. We focus on the consumers and merchant offers that work best as a pairing in each stage of CityMunch’s growth in a given location.
The Early Days: Students are our key early adopters. In general, they’re tech-savvy, time-rich, cash-strapped and social. On the restaurant side, we focus on independent cafe lunch deals, or mid-market independent restaurants to capture the weekday dinner trade.
Mainstream: Young professionals are the bulk of the market. 20-30 year old office workers looking for lunch, able to wait for the main rush to die down and save a few pounds at the same time, or looking for somewhere to grab dinner after a quick after-work drink. Mid-high end independent restaurants, independent delis and small chains are key targets at this stage. In London, we are at this stage at the moment, with high-quality small chains such as Busaba Eathai, Hummus Bros and the ETM Group being available on the platform.
Later stage: In the longer term, tourists are an important target market in global cities such as London, where over 30 million pass through annually. They are time-flexible, keen to explore the city’s food scene and do not “eat in”. On the restaurant-side, all are potential targets in the long term, but having built up critical mass with independents, we will have an invaluable product for larger chains - both in terms of filling off peak hours, but also through providing insight through our analytics platform.
Characteristics of target market
The UK restaurant market is growing - from £48bn in 2014 to an estimated £52bn in 2017. Across all Restaurants, Quick Service Restaurants and Pubs, 3.7 billion meals were eaten in 107,000 outlets in 2015.17,000 of these restaurants are in London, our initial target market.
At the same time, British diners are price sensitive. The number one reason why people cut down on restaurant trips is that they’re trying to save money*. For people that are eating out more, 35% cite the availability of deals and discounts as one of their reasons.
In addition, there is a trend towards behaviours less constrained by socio-economic norms. People in search of new experiences will happily switch between casual and fine dining. According to Sacla*, people now expect to eat out “any time, any place, anywhere”, in a trend they call the “deregulation of life”. This supports CityMunch’s thesis - the on-demand generation of consumers is looking to eat out when it suits them, and deals that offer the full restaurant experience are preferable to restrictive offers.
CityMunch's early adopting users are largely 20-30 year olds - mainly students, freelancers and young professionals. London's international students in particular are tech-savvy, time-rich and social, often having disposable funds to eat out, but not enough to pass up on a good deal.
*Sacla Report 2015 (“Eating Out Today and Tomorrow”).
For new cities, our strategy is as follows:
Identify which deals at which merchants would be attractive to students, through partnering with student ambassadors.
Approach the “low hanging fruit” - locations which are likely to be willing and easily able to offer such deals. For them, CityMunch is a way of communicating instantly with one of their key target markets.
Emphasise a launch date - circa two months from first approach. Offer incentives (free periods) to put high offers on the platform in anticipation of launch, build up an attractive set of offers in the target locations.
Build a buzz through intensive student-focussed marketing during launch week through sponsoring events, direct sign-up incentivisation, localised branding and social media campaigns.
Grow through referrals. There’s a built-in referral campaign in the app, which uses bonus discounts to encourage people to refer their friends. Adding to that, CityMunch’s no-restrictions model makes it particularly suitable for larger group restaurant meals. Only one diner needs have the app to secure the deal, but the other members of the group naturally engage with the app, and the word can spread.
Since launch, we have conducted limited-budget marketing campaigns in London, including;
- Partnering with restaurants / cafes to advertise the app.
- Working with youth hostels to promote the app to guests.
- Building an engaged social media following, especially on Instagram.
- Working with food bloggers, money-saving bloggers to promote the app online.
With the increased marketing budget provided by Seedrs funds, we will be able to ramp up London marketing, including local PR, outdoor advertising in key locations and an increased digital presence, especially through social media.
In addition, having now been selected for the Just Eat Food Tech Accelerator program, we intend to leverage their network and expansion expertise to rapidly increase our market penetration.
CityMunch will succeed in its competitive market by:
1 - Solving a problem for both sides of the market. For restaurants, CityMunch is a flexible platform that can be moulded to their individual circumstances. It offers a) flexibility of time and economics b) instant control c) limitability of covers. It attracts customers, when they want them, and they only pay anything after we’ve had a meaningful impact on their business. For consumers, CityMunch gives them something they actually want - a large set of deals that don’t restrict their experience in any way, just save them money. The deal will always apply, no matter what the group size; there are no unique terms to read through. By properly addressing the needs of both sides of the market, we can become more and more valuable to everyone as the user base grows, and establish a strong market position.
2 - Building out our analytics platform. As we work with larger chains of restaurants, our analytics platform will be ever more important. We’ll have access to a unique data set due to the quantitative nature of our offers. Whether it’s the minimum offer of interest to groups of 22 year olds on a Friday night, or how much higher offers at full service restaurants need to be than casual dining operations, we’ll have the answer. This information is valuable in its own right, with access potentially forming another revenue stream. In time, we’ll be able to advise on offers and ultimately allow restaurants to automate the offer creation process using real time data and predictive analytics.
3 - Forming partnerships. We will open up our database to allow others with online platforms or apps to advertise CityMunch offers, in revenue-sharing agreements. This will increase the use of the app and allow us to enter new territories with a ready-made consumer base.
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