A new investor is on the way. Interview with Choice co-founder Volodymyr Olyanitsky
Choice (formerly ChoiceQR) is a startup founded by Volodymyr Olyanitsky and Alex Ilyash during the COVID-19 pandemic. It is a platform that develops solutions for HoReCa, a segment of the catering and restaurant businesses. Choice helps to create custom apps, websites, and online menus featuring QR payments and a CRM system.
The company’s idea is to become a single point of communication between restaurants and their guests through QR payments, web pages, table reservations, ordering, and food delivery functionality. For example, restaurants can sign up for the system and create an online menu for free, and then Choice offers them a paid subscription for additional services, with the price for Ukraine ranging from $19 to $95 per month.
The startup’s lead investor is the Czech company Presto Ventures. At the beginning of its development, the project raised €100,000 in investment from the British Seedcamp and Czech J&T Ventures. Choice received another €200,000 from the Czech investment company Reflex Capital. Subsequently, Reflex Capital invested another €400,000. In October 2021, the startup raised a pre-seed investment of €700,000.
As of 2023, Choice has grown to a thousand regular subscription customers, 16,000 signups, 5,000 paying customers, and has entered the markets of 25 countries. The service has offices in the Czech Republic and Ukraine, operates in Poland, the United States, and Hungary, and is used by about 16,000 businesses worldwide.
In this interview with AIN.Capital, Choice co-founder Volodymyr Olyanitsky shared the company’s achievements over the past year, announced new technological solutions for the platform, and shared details of the service’s integration with Glovo.
At the start, your service raised investments to enter new markets. Did you succeed in achieving this goal?
From the beginning, we were represented not only in Ukraine but also in the Czech Republic, so we succeeded in entering other markets. The fact is that many Ukrainian startups have been able to build their businesses in Ukraine, but they have not been able to jump into new markets. We were lucky because my business partner, Alex Ilyash, has lived in the Czech Republic for 17 years and understands how European business works. Given his market expertise, it was easier for us to launch in the Czech Republic.
As for other countries, we entered the Polish market a year and a half ago and now have a good position — we are about second in the market in our niche. In addition, we opened the Baltic market with an office in Tallinn, Estonia. We also tried to gain a foothold in Germany, but we do not plan to make new attempts, as this market is too expensive and highly competitive for us. We are focusing on Eastern Europe, where there is less competition and less initial investment for expansion.
In general, the European market is less receptive to our service due to the limitations of the QR menu concept, which doesn’t resonate there. Even if an online menu exists, it typically appears in PDF format. Unlike Ukraine, Europe is not as digitally advanced, so we focus solely on developing our QR delivery business in that region.
What were your platform development plans, and which did you implement?
We tripled our core indicators. I mean client revenues—the number of customers and turnover have increased. We entered Poland and the Baltic states and expanded our team to over 130 people. Ukraine remains our #1 priority market, so about 65 specialists work in the Ukrainian office.
Our product portfolio has also changed. We developed some pilot platform features the whole time, which are, however, supplementing each other. Therefore, we began developing an online menu with an order-to-table option where guests can reorder without a waiter using just the QR menu. But as a result, 90% of our efforts during the last 18 months were dedicated to developing a delivery service. It is our core product.
A restaurant makes money on both in-house and online orders by Glovo, Bolt Food, and, finally, its own delivery service. Choice provides businesses with a complete distribution and takeaway package. We tested the options in small, local, and medium-sized businesses, and now, we are slowly getting to the enterprise sector.
We also integrated two delivery providers—Uklon and Glovo—into Choice so that the entities not present there can still conduct their own delivery on a crowdsourcing basis. Our platform allows launching your private delivery and “lending” a courier.
Did you attract new investors in 2023?
Yes, we are at the final stage of negotiations with a European fund. We cannot disclose who it is, the details, and the deal amount, but we will close the round soon.
The 2022 total investment in the platform was €2.2m. What is its current estimation?
It’s €3.5m, including the last closed round.
What is the current company’s estimated value?
Our capitalization hits $15 to 20 million.
How will you use raised funds?
Our Ukrainian product feels fine. So we will reinvest its revenues in itself. We will focus on the product team expansion due to the growing numbers of customers and features and product roadmap. Our appetite for new features to implement is growing as well. And there are new markets to enter.
Do you plan new tech solutions for the platform?
We aim at new solutions for networks. We have got some niche-specific solution requests. For instance, we want the restaurants to choose who will deliver their orders: their own, Glovo’s, or Uklon’s couriers.
It should work like this: A restaurant sees delivery costs and provider options, e.g., 4 km distance for one price or another. We want businesses to calculate the most cost-efficient delivery option via our platform.
Our plans also include loyalty and CRM system development. Our customers’ biggest problem is that they never really knew their guests and had no data about them. This is where any business should start to study their clients. How many of them are there, how often they come, how often they return, an average bill, their names, what they like, etc.
Currently, we gather guest data and make businesses familiar with their customers. It may sound like a piece of cake. Because everyone believes data was collected all the time, but it wasn’t. People used to pay via terminals, and it was impossible to get any data about them. Then, we implemented a client database tool enabling a new level of awareness for the restaurants. While placing an order or paying, a client can enter their email or phone number for better analysis of their favorite dishes, being in touch with them and making a loyalty system possible by, for example, providing a 10% discount for the next order.
Did the restaurants & cafes feel the difference in profits after starting cooperating with you? How does it work?
In Ukraine, for sure. The average bill grew according to our numbers. Why? First, users used to order on marketplaces, and catering entities paid certain fees per client. In the case of a loyalty system (if a guest visited a facility at least once, it promotes repeating orders with bonuses, discounts, or promo codes—edit.), guests use its bonuses to make another order directly at the restaurant without extra fees, so the foodservice must not pay marketplace fees. However, the marketplaces deliver new clients. The caterers also increase their sales if they have plenty of clients or a delicious menu highly wanted due to tons of recommendations.
Second, Choice developed a special CRM system for restaurant businesses, enabling guest data storage and order analysis at once. Using the CRM system from Choice, they get data about clients placing orders. And if a facility motivated a client to make another order with the help of different CRM system tools—given a promo code or a discount for the next order, like 10%—they will show up again. By doing this, we certainly increase the LTV (Lifetime Value is an estimate of the average revenue a customer will generate throughout their lifespan as a customer).
Thanks to such tools and their own delivery, the caterers can increase their income by 10% to 20% by working with us. But you should not expect great improvements in terms of a month. The delivery itself is a channel the clients need to get used to and be motivated to use it with promos and other bonuses.
There are marketplaces in the market still. Plus, you can always place an order directly at a restaurant. It would be perfect when an entity uses two marketplaces and does delivery. A delivery option is helpful since not all venues are present on the marketplaces. In addition, restaurants can offer more direct promotions and offers. With your direct order, you support a specific business.
What is about competition, for example, expirenza by monobank?
Our products are different. We focused less on online menus and more on the front store of facilities; however, we are still on the table via QR menu. It is also a kind of front store but more for in-house guests and not direct online customers.
We and mono almost go separate ways. Often, you may see a QR menu by Choice and a payment system by expirenza in the same house. Most clients prefer the Choice menu for its single-menu option, where an administrator can edit a menu for all at once—in-house, delivery and marketplaces.
Based on our experience, people got used to the online menu interface by Choice. All other QR menu providers followed us. For example, it was us who implemented likes for dishes. And the others copy-pasted it from us. The idea of likes came to us in a new restaurant where we didn’t know what to order, and the waiters offered things that were not really popular.
What are the terms of your cooperation with Glovo?
Glovo On-Demand is a courier lending service. Thanks to it, the Glovo couriers can perform deliveries for all restaurants that are present and not present in the marketplace. We long asked Glovo to implement this function because it was already available in other markets: Poland, Estonia, and the Czech Republic. We rolled this feature out with Wolt Drive in Czechia.
Glovo On-Demand can be implemented with our help or by Glovo directly. In fact, it is delivery for business. It costs 100 hryvnia and more depending on the weather and traffic ratio. For a client, it looks so: a person places an order and a courier is assigned; and even if a restaurant isn’t registered in the Glovo system, the client can see a Glovo courier delivering the order.
Our collaboration is also advantageous for business owners. Within a single profile, they can manage all orders from Glovo in the Choice Business app. The administrator can enter and edit data in the Choice profile, and it is synced with Glovo automatically.
How do you test and validate updates?
It depends on a problem to solve or tasks to perform. We collect feedback from clients and our team. Depending on the request frequency, we plan its implementation in our monthly or yearly roadmap. Then, we research similar solutions by our competitors, develop a beta, test it in a testing environment, and fix bugs; after that comes a release and production.
First of all, we are a SaaS platform, so we try to do things that are applicable to the widest range of clients possible. Now, we are thinking about making our task backlog public so everyone can see our workflow. And the clients will be able to vote with likes for specific tasks.
What are your plans for the development of the service in 2024?
We currently have integrations with Glovo and Uklon as delivery services. We also want more restaurants to save their time because time is money. So, we want them to accept orders from Glovo and Bolt in one tablet. We already have the first 100 pilot projects. The main product we will be working on is features for chain restaurants. And, of course, we will set up a loyalty system to increase the average check for customers.
Update as of February 14: we have clarified the current situation with attracting new investments.