The deal consolidates two young players in the market, each touting a strong roster of restaurants.
— Kristen Hawley
The move gives Resy a total of 4,000 restaurant customers in the U.S., including a significant footprint in Reserve-heavy cities like Boston and Chicago. The move also boosts its restaurant portfolio in top markets like New York, San Francisco, and Los Angeles.
Terms of the deal were not disclosed.
According to a company spokesperson, the “vast majority” of Reserve staff will be joining Resy, including Reserve CEO Greg Hong, who will join Resy as a full time advisor through the transition. “As far as beyond that, it’s something that he and I are going to figure out together. I have a a ton of respect for the business he’s built. He and I joke that we’ve been in the same trenches for the last four years,” Resy CEO Ben Leventhal told Skift Table.
Though this acquisition ends their head-to-head competition, when both Resy and Reserve launched in 2014 they had two distinct business models: Reserve working as concierge for diners, Resy charging fees to book sought-after tables at top restaurants. Over time, each shifted to a standard reservations and table management option, competing directly against industry giant OpenTable.
Restaurants currently on the Reserve platform will be moved to Resy within six to 12 months, though many could transition sooner. “I think we see a window of opportunity before the holidays to bring a bunch of customers over to Resy and then after the holidays as well, bring another tranche of restaurants over,” said Leventhal. “We’re not going to run two brands.”
Resy says it has no current plans for the valuable reserve.com domain, but according to Leventhal, “We’re certainly not going to sell it any time soon.”
Reserve sent emails to restaurant partners on Friday announcing “big news” coming in the next few days, but they did not name Resy.
Because Resy and Reserve’s reservations functionality is directly tied to its table management software, restaurants will need to be onboarded to Resy’s system. Leventhal said Resy and Reserve teams will work closely with restaurants to manage this transition “in whatever way makes sense for the restaurants.”
This acquisition is Resy’s third in the past year. Last fall, it acquired Servy, a mystery dining and guest feedback platform; in the spring it announced the acquisition of ClubKviar, a Spain-based reservation platform and concierge service that facilitates curated dining experiences for members. According to Leventhal, Resy plans to continue to use mergers and acquisitions as a means of growth moving forward. “Any opportunity to grow in non-organic ways is always exciting to us,” he said.
OpenTable, still the giant in the field, claims 47,000 restaurant partners worldwide.
Reserve launched in October 2014 as a kind of concierge service for restaurant reservations, developing deep relationships with restaurant customers and leveraging those relationships to offer diners a way in at hard-to-reserve locations. Customers paid a $5 fee for the service, and perks included promised recognition upon entering the restaurant and seamless bill payment through a stored credit card.
In spring 2016, Reserve launched its table management software, called Reserve for Restaurants, along with the ability to book free reservations through its website and app, akin to the Reserve experience of today. Reserve had raised $30 million in five separate funding rounds.
Though the product shifted focus, Hong has always maintained the concierge aspect of Reserve is one of its best assets. In an interview last year, Hong said that emulating the experience you might have with a hotel concierge is his long-term vision for the company.
Competition aside, success in the restaurant reservations business doesn’t come without its challenges.
“Digital reservations is a two sided market: diners and restaurants. As with most two sided marketplaces, the supply side is typically the most difficult, meaning restaurant adoption the hardest part,” said Hong. “Restaurant operators have so many things to deal with on a day-to-day basis, so it takes a lot of work to get in front of them to show them the benefits of adopting a new technology, even though it might materially benefit their business.”
After hiring a chief operating officer a year ago and then inking a deal with Expedia and launching a new homepage in April, Reserve has largely gone quiet. Given the trajectory of the business, rumors of a an Expedia acquisition made sense. At least one other company says it walked away from the deal.