Hungryhouse is a website that aggregates takeaways in the UK, allowing customers to order from multiple restaurants from the one site.
The company was promised funding after a Dragon’s Den appearance in 2007, though ended up raising money from a different source.
I’ve been talking to co-founders Shane Lake and Tony Charles about how the business has grown since then, and their plans for the future…
The last time we spoke, you had secured some funding for the business, what did you use this for?
We used the funding to grow the business as much as we could. This included setting up an office in Prague, and employing more sales staff on commission to get more restaurants to sign up to the site.
We also hired developers to improve the site and the back-end functionality out, and brought the data entry in-house. Over the last six months, we have grown from five staff to a team of 23; five are UK based, while the rest are in Prague.
How many takeaways do you have on board?
There are now close to 1,700 takeaways listed on the site, from 400 18 months ago. We have a lot of coverage in the London area, but we are focusing our efforts to provide more choice around the rest of the UK.
How does the site work? How do you send orders to the restaurants?
When a customer places an order on Hungryhouse, an automated fax or email is sent to the restaurant, and the restaurant then acknowledges the order via a phone call or email.
We are introducing Livelink, a handheld mobile device that takeaways can use to receive and confirm orders.
All orders are sent in a two-step process, and restaurants need to confirm the order and the delivery time. It needs to be a closed loop to ensure that customers are getting their orders, and not all sites like ours do this.
How do you make sure that customer orders are fulfilled?
It’s important to ensure that the takeaways are providing a good service, otherwise it reflects badly on us. We spent a lot of time building up this system, and we have a team that monitor orders and can get in touch with customers if there are any problems.
Part of the challenge with Hungryhouse is to make that the takeaways sector, which isn’t always seen as provding the best customer service, meets our customers’ expectations and fulfils orders. We also have reviews on the site, and other customer feedback, which all helps to keep the standards up.
Are you finding it easier to get restaurants on board now?
Yes, referrals and word of mouth are now working well for us, and is doing more of the sales work for us now – we get roughly 100 enquiries every month, and we use a field sales team to concentrate on specific areas, as there are still plenty of areas in the UK that we don’t reach as well.
What kind of visitor numbers are you getting now?
In 18 months, it has grown from around 500 orders per day on the site, to 2,000. Our monthly visitor numbers are in the hundreds of thousands now.
And you take a cut on each order?
Yes, we make 9% on every order placed through the site. We deal with around £1m of orders each month.
You’re seeking more funding – what will you use this for?
Firstly, we want to make sure that the UK is fully covered, and to grow while we have an advantage in the market. We’re now relying on organic growth, but it is a business that could scale more quickly given the extra resources.
The overheads for the business, most of the funding would be used to grow the sales team and to increase our marketing activity. We haven’t spent a lot on marketing up to this point, and I think there is only a small proportion of the country that know about what we offer at the moment.
How have you marketed the site so far?
AdWords has been our number one marketing method, and we have also done some affiliate marketing. We also started using Facebook and Twitter a few months ago, and are gradually building up a presence.
Everyone loves talking about food on Twitter, but people don’t appreciate being spammed, so we have to be careful how we approach it.
Any plans around mobile? Takeaway seems to have potential on mobiles…
Definitely. An iPhone app is on our list for this year. I think the number of people using smartphones is growing all the time and we’d like to appeal to this market.
What are your plans for the business in the next year or so?
We’ll be looking for another round of investment, and we’ve been in communication with a few VCs, though we’re not 100% ready to sit down and negotiate this just yet.
The aim is to make Hungryhouse the top website for takeaways in the UK, and then we will be thinking about moving into international markets.
We’ll also be introducing a loyalty scheme in the first quarter, rolling out in London first of all. Customers who use the same takeaway regularly will get the sixth order half price.
Who are your main competitors in this market?
Just-Eat is our main rival, and it has had £10.5m in funding this year to help its growth. However, though the existence of a large competitor could potentially deter some investors, it proves that the business model works, and I think the takeaway market in the UK in large enough for both companies to continue to grow.