It has been an eventful few months for SpotOn, a payment-processing startup that creates point-of-sale software for small and medium-sized businesses. After increasing its revenue by more than 150% in 2019, the San Francisco-based company kicked off the new year by adding 5,000 clients and raising $50 million in Series B funding from former Twitter executives, including CEO Dick Costolo, COO Adam Bain and head of corporate development and investor relations David Rivinus.
The funding, much of which will be invested in product development and sales software for the food and drink businesses that make up about 25% of SpotOn’s clientele, could not have come at a better time. Nationwide orders to shelter in place have forced restaurants and bars to close their doors indefinitely, making their businesses solely reliant on delivery and takeout orders. In the past week, SpotOn has had more than 500 clients request online ordering software.
“I think this is actually a time when we shine most because our whole existence is based on helping businesses, and it’s really easy to help businesses when times are good,” says RJ Horsley, president of SpotOn. “But when people are struggling, that’s when the cream rises to the top.”
The restaurant industry is indeed struggling. Average revenues for U.S. restaurants are down more than 50% as compared to this time last year, and an estimated five to seven million restaurant jobs have been lost in the last two weeks. Those restaurants that choose to go the delivery route face competition from services such as UberEats, GrubHub and DoorDash, as well as grocers, whose delivery apps have seen a record number of downloads since the start of the coronavirus outbreak.
To help ease the plight of struggling business owners, SpotOn has waived POS software fees (typically hundreds of dollars) for all restaurant customers. It has also made all software products free for the next three months and online ordering services free for the rest of the year.
“All of a sudden a bunch of our clients have had their businesses change overnight,” Horsley says. “We’re doing what we can to help them survive.” In many cases, that’s involved building websites for clients without a digital footprint so that they can equip them with online ordering software.
The company’s newly created restaurant advisory board, made up of industry leaders such as Michael Mina and Brent Bolthouse, has also helped the SpotOn team identify the challenges business owners are facing. Four of chef Mina’s restaurants, for example, were affected by MGM resort closures in Las Vegas.
“Their businesses are facing the exact same challenges restaurants across America are,” Horsley says. “Them communicating their pain points and working with us to develop immediate solutions allows us to connect with our clients and quickly help alleviate some pain.”