Tock raises $7.5M to reimagine restaurant reservations, and maybe more

Oct04, 2016

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Tock, the online platform that aims to help restaurants better manage reservations and reduce no-shows, has raised $7.5 million in new funding as it plans to expand and take on OpenTable — and beyond.

The Series A round, announced Tuesday, was led by Chicago-based Origin Ventures. Other local investors included Chicago Ventures, Hyde Park Ventures and the Pritzker Group.

Restaurateurs also joined in the round, including the Melman family, founders of Lettuce Entertain You; Travel Channel host and chef Andrew Zimmern; and Will Guidara and chef Daniel Humm of famed New York restaurant Eleven Madison Park. The Melmans also participated in Tock’s seed funding round.

Tock’s web-based platform allows diners to make pre-paid, ticketed reservations. It was co-founded in 2014 by Nick Kokonas  with chef Grant Achatz; they are also the owners of restaurants Alinea and Next. Brian Fitzpatrick, a former Google engineer, is co-founder and chief technology officer.

Tock works with 167 restaurants in 38 cities across nine countries, and the company has 21 people on staff, said Kokonas, who is Tock’s CEO.

With the funding, Tock plans to double staff to about 40 employees in the next six months and hopes to be in 500 restaurants within a year.

The company’s growth has been organic, with no sales or marketing team, Kokonas said — it just made offers to its first two marketing employees in the past week. Instead, the focus has been on engineering and building out a hospitality staff to support existing clients.

The company recently hired an employee in the United Kingdom who’ll service Tock’s clients in the U.K. and Ireland, and it’s looking for more help abroad.

“Right now, we’re serving customers in Hong Kong, Australia and Amsterdam from Chicago,” Kokonas said. “It’s working great, but it cuts into our sleep schedule a bit.”

Kokonas decided Tock was ready to go into rapid expansion mode about eight months ago — and mount a challenge to online restaurant reservation leader OpenTable, which he sees as vulnerable because of an “antiquated, janky old system.”

OpenTable did not immediately return requests for comment.

Instead of using a standalone phone app, Tock’s platform is entirely web-based, with a back end hosted by Google Cloud. That cloud platform has allowed the company to handle massive demand, Kokonas said — it processed $1.8 million in payments in 30 seconds when Copenhagen, Denmark-based restaurant Noma released tickets for its pop-up in Australia last October.

On top of new restaurants, Kokonas sees opportunity to move into other industries. While Tock was created, in part, to deal with customers who ditch their dinner reservations, he said other businesses have contacted him too: dentists or other non-emergency medical services, MRI facilities — even proton acceleration facilities.

The company would not comment on revenue. Kokonas said it has processed $7 million in payments in the last 30 days, and $104 million since launching. Tock’s eventual goal is to process $1 billion annually, he said. Tock has two pricing plans — $99 per month with a $0.99 per-diner additional charge, or $695 per month with no per-diner charges.

Tock’s cash flow is roughly neutral right now, Kokonas said, but added that’s likely to change once they begin expanding payroll.

The company previously raised $2 million in a seed funding round, bringing total funding to $9.5 million. Previous investors included Basecamp founder and CEO Jason Fried and 1871 CEO Howard Tullman — both of whom also participated in the new round. Twitter’s CEO at the time, Dick Costolo, and Jellyvision CEO Amanda Lannert also participated in the seed round.

 

Originally Published in the Chicago Tribune.

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