Restaurant.com

Helping restaurants thrive in the new normal

Analytics

Raised to Date: Raised: $140,405

Aggregate Commitments $
Platform

Republic

Start Date

04/08/2021

Close Date

07/03/2021

Min. Goal

$1

Max. Goal

$10,000,000

Min. Investment

$250

Security Type

Equity - Common

Funding Type

RegA+

Series

Seed

Pre-Money Valuation

$30,000,000

Rolling Commitments $
Status
Funded
Reporting Date

07/28/2021

Days Remaining
Funded
% of Min. Goal

14,040,500%

% of Max. Goal

1%

Likelihood of Max
Funded
Avg. Daily Raise

$1,633

# of Investors

123

Momentum
Funded
Log in or create a free account today to gain access to KingsCrowd analytics.
Location

Norcross, Georgia

Industry

Food, Beverage, & Restaurants

Tech Sector

Foodtech

Distribution Model

B2B/B2C

Margin

Low

Capital Intensity

Low

Business Type

Life Style

Restaurant.com, with a valuation of $30 million, is raising funds on Republic through Reg A+ crowdfunding. The platform connects diners, businesses, restaurants, and communities and helps diners save money at thousands of restaurants across the country. Ketan Thakker founded Restaurant.com in 2001. The current crowdfunding round has no minimum raise and a maximum raise of $5,000,000, and the funds will be used towards marketing, operations, sales, legal expenses, auditing, information technologies, and outstanding liabilities. RDE has over 8 million customers and has helped them save more than $1 billion through its restaurant deals. The company generated revenue of $10.6 million in 2019 and plans to grow further with its unique business model and technology upgrades.
Balance Sheet

Cash and Cash Equivalents

$560,000

Investment Securities

$0

Total Investments

$0

Accounts and Notes Receivable

$246,000

Loans

$0

Property, Plant and Equipment (PP&E)

$4,979,000

Property and Equipment

$0

Total Assets

$5,785,000

Accounts Payable & Accrued Liabilities

$2,656,000

Policy Liabilities and Accruals

$0

Deposits

$0

Long Term Debt

$7,906,000

Total Liabilities

$10,562,000

Total Stockholders' Equity

$-4,777,000

Total Liabilities and Equity

$5,785,000

Statement of Comprehensive Income Information

Total Revenues

$1,163,000

Total Interest Income

$0

Costs & Expenses Applicable to Rev

$3,182,000

Total Interest Expenses

$0

Depreciation and Amortization

$253,000

Net Income

$-2,272,000

Earnings Per Share - Basic

$0

Earnings Per Share - Diluted

$0

Auditor: Weinberg & Co.
Financials as of: 04/08/2021
Log in or create a free account today to gain access to KingsCrowd analytics.
Raise History
Offering Name Close Date Platform Valuation/Cap Total Raised Security Type Status Reg Type
RDE 02/26/2022 Issuance $31,000,000 $164,800 Equity - Common Active RegA+
Restaurant.com 07/03/2021 Republic $30,000,000 $140,405 Equity - Common Funded RegA+
Log in or create a free account today to gain access to KingsCrowd analytics.
Upgrade to gain access
Pay Monthly
Annually (Save 17%)

Starter

$8.33 /month
billed annually
Free portfolio tracking. Limited reports and filters.
Plan Includes:
Everything in Free, plus
Advanced company search ( limited filters)
Founder profiles and exclusive webinars
2 Analyst Reports per month
Get Starter Annual

Pro

$25 /month
billed annually
Unlimited analyst reports and market analytics.
Plan Includes:
Everything in Starter, plus
Full access to all Analyst Reports
Filter on Staff Picks (e.g. Top Deal, Deal to Watch, etc.)
Market Analytics
Get Pro Annual

Merlin

$41.67 /month
billed annually
Full site access including Merlin ratings.
Plan Includes:
Everything in Pro, plus
Search and filter companies by Merlin ratings
Company specific Merlin rating and risk assessment
Get Merlin Annual
Already a member? Log in here.

Analyst Report

Synopsis

The restaurant industry was one of the hardest hit by the COVID-19 pandemic. It ended 2020 with $240 billion less than previously estimated sales, which led countless businesses to shut down. Although the country has started edging towards normalcy, restaurants can still use all the help they can get.

Restaurant.com is here to answer that call. Established in 1999, it serves as a restaurant directory that offers consumers money-saving deals at dining establishments across the country. Hungry diners simply need to search Restaurant.com’s website or app for an appetizing deal, select the promotion, and bring it with them to the restaurant. The platform also benefits the restaurants, who can partner with Restaurant.com in exchange for promotions and custom microsites that can draw in more customers. 

Restaurant.com aims to develop itself further by launching “a new menu of services.” According to the company, these will help restaurants increase the average check size and encourage customer loyalty on top of bringing new customers in. 

However, Restaurant.com gives investors a number of reasons to be concerned. Not unexpectedly, the company’s 2020 revenue plummeted in the wake of COVID-19. In addition, the company’s revenue has not been audited, raising questions about its financial credibility. Perhaps an even larger threat to Restaurant.com is its own reputation. The company has garnered exceedingly poor ratings, with many online reviews describing it as a scam. Altogether, there is a lot to carefully consider before choosing to invest. 

The Kingscrowd investment team has given Restaurant.com’s current Republic raise an Underweight rating.

Price

Restaurant.com is currently raising at a $30 million valuation with no discount. Given the company’s enormous revenue decline in the most recent year (from $10.6 million to $1.1 million), this valuation is far too high. The price rating for Restaurant.com is one of the weaker points of an already worrying raise.

Market

COVID-19 has presented enormous problems for the restaurant industry. Everyone staying home and not dining out means restaurant profits underperformed to the tune of $240 billion in 2020. That said, it still is a massive market  worth $800 billion in 2017.

Competition is rampant in this space. Restaurant.com shows customers nearby options and cheaper prices, but does not deliver food. UberEats, DoorDash, and Grubhub operate in similar niches and are much more widely used. In terms of dine-in experience, Groupon is a much larger and better-established company providing a similar service. There is room for multiple winners in this space, but these firmly entrenched competitors that not only match customers with nearby restaurants but even go the extra mile to deliver the food present a growth problem for Restaurant.com.

Team

The current CEO and chairman of Restaurant.com is Ketan Thakker. Thakker has highly relevant entrepreneurial experience as well as a solid educational background. He has an MBA from Northwestern University’s Kellogg School of Management and previously worked as the chief financial officer at Apartments.com. He also founded TripRental.com.

Aaron Horowitz, president and general counsel for Restaurant.com, graduated with a JD from the University of Chicago Law School. Vice President of Technology Josh Randall has a long career in various technology-related roles, including CTO at Rx-Precision and director of IT at Durex Industries.

Rounding out the executive team is Tim Miller, who oversees all business-to-business operations for Restaurant.com. Miller has been with the company since 2004 and has generated hundreds of millions of dollars in sales for Restaurant.com.

The Restaurant.com executive team members have impressive academic backgrounds and are led by a CEO with solid entrepreneurial experience.

Differentiators

The food app market is already full of reputable and popular companies. Uber, DoorDash, and Grubhub connect customers with local restaurants for delivery and pickup. They don’t focus on the dine-in experience that Restaurant.com does, but they do offer deals and discounts for their users. The widespread popularity of these apps means their deals are likely more enticing to customers than Restaurant.com’s offers. Restaurant.com also comes up against much more established competition like Groupon, which offers similar services and has a much bigger presence in the market.

Restaurant.com seems to have an uphill battle ahead to outpace the growing number of well-established food-related apps, both for delivery and dine-in. This lack of differentiation, coupled with the across-the-board negative reviews of the service, only adds to the company’s Underweight rating.

Performance

According to Restaurant.com’s raise page, the company generated revenue of $10.6 million in 2019. COVID-19 impacted the business heavily in 2020, lowering revenue to just $1.1 million. However, investors should take this with a grain of salt, as this financial performance is entirely unaudited.

Restaurant.com claims it has around 8 million customers and more than 184,000 establishments listed on its platform. But Restaurant.com also has a major reputation problem. Even assuming its user traction and revenue is as solid as it claims, negative customer feedback is rampant. Restaurant.com has a 1.7-star rating on Trustpilot, a 1.4-star rating on sitejabber, and a one-star rating on the Better Business Bureau website.  

Risks

Many aspects of Restaurant.com’s current raise are questionable. Numerous bad reviews that accuse Restaurant.com of running scams and poor customer service may lead to future legal troubles, which could be financially devastating. On top of that, Restaurant.com’s product isn’t particularly innovative, which limits its potential users. The poor reviews also pose a risk to the product. The more negative reviews it gets, the less new users will want to try it.

Bearish Outlook

Trust is vital for a company’s long-term success, and it’s safe to say that customers don’t trust Restaurant.com. Horrible customer ratings limit the company’s possible growth and pose a huge threat to its future. When potential customers have countless options for finding dinner deals and easy access to online reviews, Restaurant.com’s poor reputation is crippling. The company has major competition in its market, all of which are well-established and widely used services. Its product lacks differentiation of any kind, which gives customers even less reason to use it. The company also has unaudited financials, which makes this current raise suspect as well. Finally, the valuation can’t be justified after such a monumental revenue decline.

Bullish Outlook

If Restaurant.com’s revenue numbers are to be believed, $10.6 million in revenue in 2019 shows that there have been active users in the past. Restaurant.com claims that nearly 8 million people have utilized its services, and as the food technology market and food app market continue to grow, so does Restaurant.com’s available market. The company has also been operating since 1999, indicating that it may have staying power.

Executive Summary

Overall, investors should approach Restaurant.com with caution. All financial information is unaudited, meaning its revenues and profits cannot be confirmed. The online perception of the company is exceedingly poor, and its product doesn’t seem positioned to outperform any other food app on the market. The company’s current valuation of $30 million is not at all justified by its alleged $1.1 million 2020 revenue, making this a worrisome investment. The user base seems solid enough, but it isn’t enough to save the raise. As such, Restaurant.com has been given an Underweight rating.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Ethan Thomas.

Other Deals

Blendid on StartEngine

NPR reports that an estimated 75% of Americans believe that they have a…

RegCF
Ayoba on Republic

Beef jerky is a classic snack that hits the spot for many meat lovers looking for a salty,…

RegCF
Genius Juice on Republic

Americans are increasingly looking for healthier food and beverage options. An overwhelming majority of Americans…

RegCF
Create your first portfolio
WELCOME TO YOUR OWN INVESTMENTS PORTFOLIO ON KINGSCROWD.

Now you can track all of your startup investments in one place utilizing our state-of-the-art portfolio tracker tools. To begin, create your first portfolio below.

Add to portfolio
Add Restaurant.com on Republic
Follow company
Follow Restaurant.com on Republic
Want to learn more about Restaurant.com?
Join the Pre-IPO Market’s #1 Ratings & Analytics Service FREE for 7 days.
Yes! I want to start my free trial.
Already a member? Log in here.