Tock to Squarespace for $400 million
...and what that says about the future of restaurant reservations
Tock sells for $400 million
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.”
The famous restaurant that’s not
Well this is a story for 2021. In the San Francisco Chronicle, Janelle Bitker reports on a restaurant that closed in December, only to see someone else take over the space and reopen it using the same name and logo. According to the piece, Jason Teplitsky closed Blowfish Sushi in the Mission in December, but a new restaurant opened in its place using the restaurant's own signage. In an effort to protect his brand, he stood outside the business, threatening to block people from entering, according to the piece.
“The squabble ended with the police arriving. Teplitsky went home, and the business calling itself Blowfish Sushi kept fulfilling delivery orders,” Bitker writes in the piece, which is worth a read for all the details.
As it turns out, food coming from the restaurant location is also impersonating another restaurant, and this one carries no outside signage: Japan’s Wagyumafia, which touts, among other things, a $180 wagyu sandwich. A manager at the San Francisco address says that the new owners weren’t trying to impersonate the closed restaurant; it was simply easiest to use the signage that was already there. But, the piece reports, employees were cagey about the restaurant’s owners, only saying it was owned by “a corporation.” The Chronicle was able to confirm that the wagyu restaurant is not affiliated with the famous Japanese restaurant with the same name; a rep for the “real” restaurant says it’s considering a lawsuit.
As of Tuesday afternoon, the DoorDash listing for Wagyumafia (and associated $180 imposter sandwich) was still active. By this morning the listing was gone. A year ago, San Francisco’s Kin Khao restaurant had a similar problem with a restaurant using its name on Grubhub. At the time, delivery companies blamed the problem on a clerical error with a yet-to-be-introduced restaurant with a similar name. This particular instance seems more nefarious given it’s copied signature and very expensive menu items. It raises a lot of questions about accountability and branding (and ethics!) on third party platforms like DoorDash, especially given how quickly and easily anyone can spin up a virtual concept.
It honestly feels a little like the early days of social media, before the blue verification checkmarks on Twitter, before disinfo ran rampant. Then, the networks’ policies were some version of “we rely on self-policing” — that is, users report impropriety. Things (finally) seem to be shifting away from these honor systems; I just saw that Twitter is readying a big Covid vaccine disinfo mitigation strategy, for example. But I’m very curious how the third parties will proceed with reports of impersonation or other brand impropriety moving forward. Will it be up to diners to report imposter businesses? The original brands to report copycats? And will there be any accountability for a business that tries to game the system?
Wednesday’s Chronicle follow-up notes that the listings have been removed, but also what I’ve said above: There’s a growing trust problem between diners and restaurant listings on third parties.
What else is happening?
Slice has introduced a point-of-sale system. The online ordering and delivery app that targets independent pizzerias announced Slice Register last week, a point of sale system tailored to the needs of pizzerias and capable of aggregating all orders — online, phone, in-person — in one place. The company also announced a rewards program for Slice app users, collecting one “pizza point” for orders on the app over $15. Eight pizza points = one free cheese pizza. (Extra points to Slice for its creative branding there!)
Yelp introduces a new tool for Asian-owned businesses. The ratings and reviews company in partnership with a nonprofit called Gold House introduced a way for business owners to self-identify their business as Asian-owned on Yelp.
Deliveroo debuts in the U.K. The European delivery service debuted publicly for some investors last week and will be available more widely today. But the much-hyped offering has been tempered by reports that many investors have passed out of concerns about the gig labor model. It’s in stark contrast to what’s happening stateside right now, as third party delivery companies continue to enjoy huge valuations and growth even amid unprofitability.
DoorDash continues to promote its digital convenience store offering, DashMart. This time, with some data: According to a recent Edison Trends report sent my way by a DoorDash rep, DoorDash customers increased their convenience store spending by 162 percent from the third quarter of 2020 to the fourth. Separately, DoorDash shared the largest amount spent on a single convenience order on its platform: $655 for an order that included 35 veggie, sausage, and bacon breakfast pizzas.
Upcoming: On Monday, 4/12 Andrew Genung of Family Meal and I are back on Clubhouse at 10:30am ET / 7:30am PT with special guest Serena Dai of the San Francisco Chronicle. We’re definitely talking the recent Chronicle restaurant impersonation story (above), and we’d love to hear from you. Please join us!