French company Zenchef, which offers an all-in-one marketing solution for restaurants, has taken on the challenge of uniting thousands of European eateries on one platform. With 2,500 customers in France, Spain, and the UK, and plans to expand to Germany, Italy, Portugal, and Turkey in 2016, co-founder and CEO Xavier Zeitoun and his team are quickly becoming the continent’s dominant force for restaurant services. Early next year, the company, previously known as 1001menus, will launch an app marketplace dedicated solely to restaurant services.
Today, Zenchef announced a 6M euro funding round. Zeitoun spoke with Street Fight about how the company manages international expansion and the rise of competitors around the world.
Zenchef started as something completely different. Can you talk about the evolution of the company and what changed its trajectory?
When we started almost five years ago, we were an online directory for restaurant menus, but we completely failed after a few months. We didn’t get any traction. So we decided to pivot to a B2B business model.
By speaking with a lot of restaurant owners, we realized there was a digital revolution within the industry, but most of those owners didn’t have the time or skills to build their online presence. We started to think about how we could help them manage their visibility, attract new customers, and improve customer loyalty. In 2012, we launched a simple tool to build restaurant websites in minutes. Our customers asked us if we could also help them with their social media and mobile presence, which led us to the conclusion that most restaurant owners don’t want to use multiple tools on a daily basis — they just want one solution, because it’s easier, saves them time, and they don’t have to develop their own user bases.
We see a lot of new services emerging in the online ordering, reservations, and POS sectors. That brings new complexity for restaurant owners. Our goal is to open our platform so the services in these categories will be able to connect to our platform, making it easier for restaurants to see all of the services dedicated to them.
The restaurant technology sector is booming; it’s just been a matter of our finding the right positioning in the market.
Is there a particular service that’s been especially beneficial to your clients?
Most of the time, restaurants contact us because they need a website or a reservation management system. In many cases, they don’t know they can also do email marketing campaigns or manage social media more efficiently. They start using those other features. The real added value is to have all of these features communicating together. We have a CMS where our customers can update and edit their menus, and once they’ve finished updating, they’re able to send that menu in a newsletter to their customer base. It takes one click, and there’s a nice email campaign with a menu integrated and ready to be sent.
What are some of the challenges of international expansion and how have you been managing them?
The main challenge is that restaurants are really local businesses, so it’s hard to create a global company. I’d say that a key success indicator for us is that a restaurant owner in Germany thought our company was German, because we’d done all of our marketing and sales locally — they didn’t know that we’re actually a French company. It’s a big challenge to maintain so many languages and hire native people from every country. We’re trying to benefit from the scalability that a global company has, but have a local approach and know our customers well. We can’t sell to a Spanish customer the same way we sell to a German customer.
Where do you see competition emerging in this space?
With our current product, I think we’re the most advanced technology for all-in-one marketing solutions for restaurants. I don’t see any direct competitors doing exactly the same thing, even in the U.S. Companies like Squarespace or Weebly or other website builders are starting to add new services to become all-in-one solutions, because they see restaurants are becoming a commodity. Now that they have huge customer bases, it’s really easy for them to excel if they add an online reservations feature, for example. I see these kinds of companies moving toward our position.
I also see POS technology providers trying to add marketing services, and I think they’re having the same realization we did: Their customers really want a single solution, not multiple tools. I’m sure we’ll have many more competitors coming from different categories. The key in this market is distribution, and maybe the bigger players that already have large customer bases will start to move in on this category of services.
Annie Melton is Street Fight’s news editor.
This interview has been edited for length and clarity.