Oddle makes online ordering affordable for smaller restaurants, raises $718k

Food ordering and delivery used to be something that only big restaurant chains could do, as developing a customized management system can cost hundreds of thousands of dollars. But that is changing in recent years, as websites like Foodpanda and FoodRunner have given smaller restaurants a chance to capture a slice of the online ordering market at a low initial cost.

But something is missing. Lim Ze Yan, who operates a restaurant himself, claims that these services take a large chunk of revenues from merchants through a transaction fee, and works well only for “short term gains” and reaching out to new customers. It’s not as good for branding and customer retention.

So in March 2014, he launched Singapore-based startup Oddle to address these gaps. Oddle is a subscription service that allows customers to order the restaurant’s food using a highly customizable branded page. The startup also has an order management system for restaurant operators.

“Where there is Foodpanda or their competitors, there will be a need for Oddle […] It has been about two years since Foodpanda started, and it is only logical for restaurants to reduce their customer acquisition cost. I reckon the restaurant owners will realize by now that if they only rely on Foodpanda as their online channel, they will be paying a large chunk of revenue to them,” he says.

No slouch

The startup has done well enough to raise a S$1 million (US$718,000) seed round led by Singapore-based VC East Ventures (see our disclosure below). Just how well? Enough to cut in half the size of the seed round it wanted and aim for a larger series A round instead, says Lim.

The company has in its pocket 350 outlets from 200 merchants. All Oddle customers in Singapore are paying the startup. It also has paying clients in Hong Kong and just started free trials in Vietnam. It has processed S$2 million (US$1.43 million) in transactions in its one year of existence, representing a month-on-month growth of 20 percent.

Oddle’s pricing model is endearing to some restaurant operators. Like Foodpanda, the cost of using Oddle scales as a restaurant’s business grows. But while Foodpanda takes a chunk out of every transaction, Oddle charges a flat fee for every restaurant outlet, with subsequent outlets costing extra. The barrier-to-entry is higher than the transaction model, but operators keep more of their earnings if their online ordering businesses do well.

In addition, Oddle gives you something that Foodpanda doesn’t: a comprehensive order management system that lets restaurants control the look of your ordering page, consolidate phone, email, and ecommerce orders in one place, as well as access sales and customer data. While Oddle does not do actual deliveries for restaurants, it is testing out a feature to help those with no logistical capabilities.

The seed funding will fuel Oddle’s expansion plans. While it started by reaching out to indie brands, it has begun to target bigger operations, snagging restaurant chains like Soup Spoon and Yumcha. It also wants to expand to more countries. Besides Hong Kong and Vietnam, it has Taiwan and Indonesia in its sights.

Disclosure: East Ventures is an investor in Tech in Asia. Gwendolyn Tan, a Tech in Asia stakeholder, participated in Oddle’s seed round. See our ethics page for more information.