Flipdish becomes newest Irish tech unicorn with $1.25bn valuation

Digital food-ordering platform Flipdish has become the State's fifth official home-grown "tech unicorn" following a $100 million (€87m) investment led by Chinese conglomerate Tencent.

The funding, which follows a $48.5 million investment from Tiger Global Management early last year, values the company at $1.25 billion. This compares to a $25 million valuation in 2018, according to PitchBook.

Flipdish, co-founded by brothers Conor and James McCarthy, has followed in the footsteps of Intercom, Workhuman, Fenergo and LetsGetChecked in hitting a $1 billion-plus valuation.

Stripe, which is currently the most valuable private company in Silicon Valley at $95 billion and one of the largest globally, is co-headquartered in Dublin and San Francisco, but was originally founded in the US by brothers John and Patrick Collison.

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As part of the latest investment Flipdish said it intends to hire 700 people this year, with many of the new jobs expected to be created locally. The company will be mainly hiring for tech-related roles, including software architects, data scientists, engineers and product designers.

Founded in 2015, Flipdish positions itself as an alternative to online fast-food delivery aggregators such as Just Eat, Deliveroo and Uber Eats by helping restaurant owners bring their online ordering capability in-house.

The company provides software that allows direct ordering from restaurants via a “white label” app solution, enabling owners to retain control over business data while still tapping into the growing market for takeaways. The company charges a 7 per cent fee per order compared with up to 30 per cent from some rivals.

Customers

Flipdish has thousands of independent restaurants as customers, as well as major brands like Yamamori, Dunnes Stores and Eddie Rockets.

The new investment will be used to fuel international expansion and for research and development into additional products for businesses operating in the hospitality sector.

The financing comes amid a surge in business for the company, which has benefitted from the coronavirus pandemic. Flipdish was valued at just $24.2 million as recently as July 2018, according to Pitchbook. But with consumers increasing spending on takeaways during the Covid crisis, revenues have jumped.

"Digitisation has been transforming the hospitality sector for years. The ongoing pandemic has further accelerated the trend, with hospitality businesses becoming increasingly dependent on digital experiences to attract and retain customers," said chief executive Conor McCarthy.

“Our investment will help us to empower more hospitality businesses around the world to grow with the best-in-class technology,” he added.

Shareholdings

Tencent has paid approximately $80 million for close to 8 per cent of the business. Although their shareholdings have been further diluted following this and the recent Tiger investment, the McCarthy brothers still have control of the board.

Scoring Tencent as an investor is a major coup for Flipdish. Among the companies the WeChat developer has previously backed are Tesla, Lyft, Snapchat, Spotify Temasek, Uber, Didi Chuxing and Flipkart.

Tencent joins Tiger, Global Founders Capital, Elkstone, Enterprise Ireland and Growing Capital as backers of Flipdish. As with LetsGetChecked, which became a tech unicorn last year, Flipdish received no backing from Irish institutional backers or venture capital firms at either seed or Series A level.

Flipdish, which employs more than 300 people and has over 3,000 restaurants on its platform, is operational in 25 counties.

The last publicly-available accounts for the company show accumulated losses rose to €4.5 million in the year to the end of March 2020, compared to losses of €1.56 million a year earlier.