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Tock to Squarespace for $400 million
...and what that says about the future of restaurant reservations
A few weeks after that glowing Fast Company profile in which Tock CEO Nick Kokonas said he’s open to a sale of the company, he has sold the company. Last week, Squarespace acquired Tock for “for more than $400 million in a mix of cash and stock.” Kokonas said on Twitter that he’ll stay on as CEO and the entire team will also join Squarespace “to support our clients in digitally connecting with the world.” (Worth noting in the piece that “a source close to the company” pegged its valuation around $500 million.)
“We get inquiries every day, and I have investors. If I never sell it or liquidate part of it, then I never get their money out. They had faith in me and they deserve that return,” Kokonas told Fast Company in its piece. (Tock’s investors include chef and restaurateur Thomas Keller and Chicago-based Lettuce Entertain You Enterprises restaurant group.)
Squarespace is a website building and ecommerce platform that’s set to go public this year. It confidentially filed IPO paperwork in late January; a public version of this paperwork will become available a few weeks before the initial public offering and could include more info about Tock’s business. Kokonas declined to comment on the news, citing the impending IPO.
“I’ve long admired Tock’s vision to reimagine how reservation-based businesses connect with their customers,” said Squarespace founder and CEO Anthony Casalena. “We believe that together we will continue building on their success, bringing Tock’s capabilities to our all-in-one product suite in service of our customers in the hospitality industry and beyond.”
Tock’s biggest competitor (and frequent target of Kokonas’s ire) OpenTable had an acquisition of its own — selling for 2.6 billion cash to Priceline in 2014. The company later took a $941 million write-down on the business, meaning Priceline (now called Booking Holdings) probably overpaid for it. At the time of the acquisition, Priceline added restaurant bookings to a portfolio that included the airline, hotel, tour, and rental car businesses. It was a move that made sense in the growing OTA (that’s online travel agency) business at the time.
But times change, and so does the online reservations business. Seven years later, OpenTable is still the undisputed leader in terms of restaurants on the platform — over 50,000 at last count, worldwide. Resy sold to American Express just two years ago, an unsurprising home for a reservations, experience, and customer relationship management company. At that time it felt a little like the end of an era of experimentation; the early days of Resy, competitor Reserve (eventually acquired by Resy) and Tock (plus a handful of smaller failed operations) made for fun newsletter writing half a decade ago.
But the way people search for restaurants has changed. Why? Well, Google, mostly, but also Instagram and influencers and the internet. Tock’s marriage to a website building company might be the most of-the-moment move the company could have made. It’s a statement about the type of restaurant that values Tock. What once started as a way for upscale restaurants to sell tickets to dine (vs. a free reservation) evolved into a way for restaurants to control their reservations and events — and, once the pandemic took root, their takeout and even delivery orders. Now it seems Squarespace’s move is to help restaurants who use its platform more easily integrate Tock’s functionality that encourages customers to interact and transact directly with restaurants. (I asked a Squarespace rep how many restaurants use the platform but have not heard back.)
Eater Chicago reported that existing Tock customers won’t see any changes to reservations functionality but that Squarespace customers can expect additional Tock functionality in the “coming months.”