BigDish reveals new CEO and strategy update – where will shares go next?
Food technology business BigDish has had a lot on its plate recently. Over the last seven days, the firm, which operates a yield management platform for restaurants, has revealed a new chief executive and updated its growth strategy for the next 12 months.
The market has received the updates warmly, with shares advancing from 1.5p to 1.95p over last seven days. This has marked a welcome change of pace in the wake of the business’s considerable decline in the latter part of 2017. So, can investors expect this bull run continue? Here, BigDish founder Aiden Bishop discusses how the company has been gearing up to become a significant force in the UK restaurant sector.
Flexible discounting
BigDish’s model is based around the idea that a restaurant cannot make any money out of empty tables, so even a cut-price bill is better than nothing. Through the company’s app, a restaurant can offer discount prices during periods when it does not expect to be busy.
For the restaurant, this arrangement helps to smooth footfall and ensure staff are not over or under-worked at different times. Meanwhile, diners can enjoy money off depending on the day and time they choose to book.
The yield management model is not new. Indeed, it has now been used for decades by airlines, who offer different ticket prices at peak and off-peak times. However, the approach has not historically been utilised by the UK’s restaurant industry. BigDish, which came to the market last year in a £2.2m IPO, aims to change this.
The closest well-known comparison is Tastecard, which quickly gained popularity upon its launch in 2006. The membership scheme offers diners set discounts at participating restaurants for an annual fee. However, as Bishop highlights, there are crucial differences between Tastecard and BigDish’s models.
Whereas Tastecard did not drive bookings to off-peak hours, instead opting for blanket discounts on chosen days, BigDish lets restaurants themselves decide when cuts should be utilised. Bishop adds that BigDish takes a much more data-driven approach to help restaurants identify the best times to offer discounts.
‘We understand our user behaviour; we know when people are booking, we know what restaurants are popular. This can really help us and our clients know how to offer their products.’
Tastecard sold for a whopping £100m in 2015. Despite the differences between the two organisations, Bishop says this gives investors an idea of the sort of value that can be generated in the restaurant discounting market.
Steps forward
Following successful beta testing in Bath last year, January has marked a highly busy month for BigDish. Firstly, the company announced the launch of its platform in Bournemouth. The firm migrated over 50 of the area’s most popular restaurants from a local app called TablePouncer, which it acquired last year.
Through the BigDish app, these restaurants will offer a 50pc discount on food from Sunday to Thursday, at least twice per deal. The business expects this number to increase. Bishop tells us that the Bournemouth launch has been more successful than BigDish expected so far.
‘It has been going very well. I have just been looking today and over the last ten days or so, we sent over 250 people to one particular restaurant,’ he said. ‘This shows that it is working, it is working for restaurants and consumers seem to be enjoying it.
Alongside the Bournemouth launch, BigDish also finalised a redesign of its app, intending to increase its appeal to the UK market.
Earlier this week, the company went on to announce that it has also launched in Bristol at a select number of restaurants.
With the app now live in two areas, the firm also revealed an update to its 2019 strategy. This will see it target growth in numerous cities contained within two distinct ‘territories’. As well as Bournemouth, Territory One consists of mainly coastal towns and cities like Southampton, Portsmouth, Basingstoke, Guildford, Dorchester, and Winchester. Meanwhile, territory two covers Bristol alongside Gloucester, Bath, Swindon, Oxford, Windsor, Slough, Exeter, and Plymouth.
BigDish is targeting at least 200 restaurants in each territory. It picks these based on their TripAdvisor ranking and reviews to ensure they can offer a certain level of popularity and quality to the platform. The business has said that expansion into other UK territories will be announced in ‘due course’.
Bishop believes that growth in these in these first two territories will likely drive BigDish’s newsflow and share price over coming months.
‘For the next three months is really going to be mostly focused around development within the UK and new towns and cities we go to, with more restaurants joining the platform,’.
He adds that he believes there is ultimately the potential for 6,000 restaurant partners to partner with BigDish in the UK.
‘It will take a bit of time to get them all board, of course. We have come up with this figure because similar schemes have enjoyed these sort of partnership numbers. Any restaurant that is open to discounting is a potential BigDish partner.’
New leader
This week also saw BigDish reveal a new chief executive to lead it through its all-important growth phase.
Sanj Naha will take on the role in mid-February when current chief executive Joost Boer steps down to the position of chief product officer. Naha has significant experience in restaurant and hospitality technology platforms, holding senior positions at major players like TripAdvisor and Bookatable. He has also worked as a consultant for several UK restaurant groups.
In his statement, Naha said he has already identified additional UK locations into which the company can grow. He added that he ‘fully expects’ the business to achieve breakeven in its first two territories this year.
Bishop believes the combination of Naha’s appointment and BigDish’s ambitious plans make it a promising prospect for those interested in smaller technology stocks.
‘Early-stage tech, of course, carries a risk, but it can also be highly rewarding. Really, yield management is nothing new- it is relatively new in the restaurant industry but not generally. If we can grow in the UK and have a large footprint here, then our value is going to rise significantly. For people investing or looking to invest in BigDish, it is a bet on geographical growth in the UK, restaurant number growth and user growth. If we can do well on these fronts, then the company can achieve something special.’
We recently spoke to Aiden Bishop of BigDish here
