Amex is buying Tock for $400 million
More proof for access and exclusivity as the future of restaurant reservations
Last week on a summer Friday, American Express announced it would acquire reservations platform Tock for $400 million. In a statement, Howard Grosfield, Amex’s president, U.S. consumer services, said that American Express cardholders spent $100 billion last year on travel and entertainment categories, framing the acquisition as a way to “connect even more premium customers with the most exciting restaurants.”
Matt Tucker, head of Tock, told me on Friday he “believes this deal is a great one for Tock.” He said he’s staying with the company.
The acquisition gives Tock a new sister platform: Resy. Amex bought that service in 2019, but didn’t disclose terms. Since then, according to Resy’s CEO Pablo Rivero, Amex has “increased the number of engaged diners by 3x, increased the number of restaurants by 5.4x and driven solid growth in diners seated.”
Tock’s been bought before. During pandemic online ordering highs, it was acquired — also for $400 million — by website and e-commerce platform Squarespace in April 2021, weeks before Squarespace’s initial public offering. But last month, just three years later, Squarespace went private again in a $7 billion deal with private equity group Permira. Per CNBC, “Squarespace is the latest tech firm to go private, after continued struggles and underperformance as a publicly traded company.”
I thought Tock founder and former CEO Nick Kokonas might have insight on the latest acquisition news, but, alas, “I read it the same time that you did,” he messaged me after I asked for a hot take. Kokonas stepped away from Tock on the first business day of 2023, not quite two years after Squarespace bought the company.
When I added that I missed his particular style of straightforward industry commentary, he said, “I miss it too but don’t miss trying to convince operators to simply be logical.”
The acquisition seems to be about Tock’s cache of high-end restaurants.
Seven-thousand restaurants use Tock across a range of dining categories. The logic that Kokonas referenced in our exchange relates to Tock’s business model, which started as a service primarily for high-end restaurants. (Remember, Tock was initially developed for Chicago fine dining stalwart Alinea, where Kokonas is co-owner.) Its prepaid reservations dramatically reduced no-shows and gave restaurants valuable advance insight into who would fill its dining rooms. It also attracted a certain type of restaurant; the tech leant itself to the sort of experiential, fixed-price restaurant that booked out nightly.
Later, Tock offered restaurants the ability to require a deposit or credit card hold with reservation, also dramatically reducing no-show guests. This practice is now supported by all the major reservations services, and we’re (mostly) OK with it.
Then came the deals and partnerships, which have turned online reservations from convenience to premium offering — a plan to a perk. In 2020, Tock launched a partnership with Chase Ultimate Rewards to let Chase cardholders spend points on restaurant dining — including takeout. It offered credit card customers access to tough-to-book restaurants through an online portal… not unlike Amex does for its cardholders.
Now that particular deal’s probably done; the Chase website that lists partner restaurants is blank today. (It’s unclear when they were dropped from the site; the last archived edition of the website, from January, still lists them.)
Does Amex want two bookings brands?
Can they maintain the services separately? Sure, why not. Will they? I doubt it. In an email sent to its restaurant customers on Friday, Tock’s Tucker promised “no disruptions to the Tock platform or the dedicated service provided to you.” He was cagier about the future of the brand:
“As you may know, American Express owns Resy. When the deal closes, Tock and Resy will continue to remain separate businesses. After the transaction closes, which is subject to certain closing conditions, we look forward to expanding the technology and tools available to you.”
I emailed Tucker to clarify this statement as well as the future of the Tock brand but didn’t immediately hear back.
At the end of the day, it’s about access and exclusivity.
When Squarespace acquired Tock, restaurants were still reeling from pandemic restrictions and slow in-person traffic. Tock’s takeout option, spun up quickly during the first days of lockdown, attracted a certain type of restaurant — the type that wouldn’t typically offer takeout. That customer list, many scrambling to add e-commerce features to their websites, was almost certainly an attractive asset for a company that builds websites.
A customer roster of great restaurants are still valuable, but they’re more valuable to the company that’s positioned itself as offering the best access, the best perks, the best experience to the people that make it money. (Last year, Amex generated about $60.5 billion of revenue and net income of about $8.4 billion.)
Perhaps the best way to think about the future of acquisitions comes in the language we’re using to describe them. In its press release announcing the acquisition, Amex celebrated improvements to “the number of restaurants offered through American Express channels, and the ways Card Members access experiences.”
And the New York Times’ coverage of the acquisition on Friday highlighted the sort of experience now associated with the Amex-Resy brand, a service that’s known to, per the Times, “broker access” to certain hot tickets and tables. It’s probably the right way to describe the kind of digital gatekeeping that is the future of restaurant reservations.
More:
As American Express acquires Tock, who’s winning the reservations wars? — Eater
American Express is getting into luxury dining — Quartz
Squarespace sells restaurant reservation service Tock to American Express for $400 million — TechCrunch
