Australian online restaurant booking service Dimmi has announced a new partnership with Urbanspoon, the international restaurant review and recommendation service.
The partnership will provide Urbanspoon with access to the 2,500 restaurants in the Dimmi database. For Dimmi, it will boost its traffic considerably, by enabling bookings to be made via Urbanspoon, one of the world’s largest restaurant review platforms. Urbanspoon will now receive a commission for any successful Dimmi bookings made through its site.
“In San Francisco more than 50% of bookings are made online, whereas in Australia it’s only 3%,” says Stevan Premutico, CEO of Dimmi.
“If you look at other verticals it’s much higher. For hotels, 50% of bookings are made online, for airlines it’s 60%. Restaurants still have a long way to go.”
Dimmi launched three years ago, and earlier this year raised an undisclosed amount from Telstra and Village Roadshow. Dimmi was Telstra’s first Australian investment. The telco had reportedly set aside $50 million to invest in new technologies. It had previously led a $35 million investment round in U.S. company Ooyala.
While the money has helped Dimmi grow, it seems the company’s partnerships might hold the key to its success. Dimmi has existing partnerships with the major Australian restaurant and booking review sites including Optus, Fairfax, Lastminute.com.au, and NineMSN. FLT understands another significant announcement is planned for the coming weeks.
Restaurants currently pay between $1-3 per successful booking. Working with partner companies is one of the key sales channels for Dimmi. While Premutico won’t provide details on the breakdown, he says there are three ways people come to the platform: through Dimmi Direct (the company’s own website), through partner sites like Urbanspoon, or directly from restaurants’ websites. He says the partnerships are one of the key parts of the business model.
“It’s like building a mountain,” says Premutico. “When we started we were a single chunk, working on building the number of customers. What we did was work with partners where we literally plugged into all these brands.”
The Urbanspoon deal was six months in the making and Premutico says he has learnt some lessons along the way.
Negotiating a deal with an international partner
- Have something valuable to offer. Dimmi was able to offer Urbanspoon access to 2,500 restaurants. The company now books a table in Australia every fifteen seconds, and has seated three million diners so far. For Urbanspoon, Dimmi could provide a service which was a positive for its users, and had a commercial benefit;
- Find a brand match. Premutico says when dealing with an established brand you need to consider how carefully it is managed. Whether it’s Fairfax or Urbanspoon, each company will be protective of its brand. Because of this, it can take a while to build a relationship. Premutico says a larger company will want to see that you have a long-term vision, are well funded and have traction. The calibre of the Dimmi board helped demonstrate the company’s strength;
- Make sure there’s a cultural fit. While Urbanspoon is now owned by the IAC group of companies, Premutico says it still runs like a startup. It moves fast and is entrepreneurial, and that makes Dimmi a natural cultural fit;
- Complimentary expertise. Urbanspoon is one of the most trafficked restaurant review sites in Australia, and Dimmi can provide a booking service with a commercial benefit for Urbanspoon. The arrangement is a win-win for both companies.
One of the biggest challenge was figuring out who to talk to, says Premutico. In the end an introduction to Urbanspoon came from none other than Barry Diller, the president of IAC.
“From that point on it was two dogs in a park sniffing out each other. They liked what they saw, and once we got past the first dating stage it was a go.”
Dimmi’s board members include divisional director for Macquarie Capital Advisors Glen Butler, LinkedIn managing director for Australia and New Zealand Cliff Rosenberg, and Operations head for Facebook William Easton.
The company recently launched Dimmi Specials, a new service, described as an ‘off-peak marketing tool’. Premutico says just 36% of restaurant tables are booked, and Dimmi Specials is aimed at improving that figure, by offering discounts to patrons when restaurants are quiet. It worked closely with Urbanspoon to develop the idea, and Premutico says the take up has been promising.
Dimmi only operates in Australia, but there are plans to look at other markets in the future. Premutico says with more people using mobile search, booking online is the easiest way to reserve a table.
“The plan at the moment is to get more people booking online. Currently, between 6-10 calls to restaurants are not answered.”