Tag Archives: computer service

Olo Is Not Everyone’s Food Delivery Staple | Instant News


It is as if the online food delivery industry not convoluted enough, apparently there are other intermediaries.

Unlike

ByDash

and

Grubhub,

15 year old Olo is not a name your average eater will know. From a consumer’s point of view, that is largely behind their experience of ordering online from a restaurant, helping the chain with things like third-party order integration and fulfillment. It competes with online delivery platforms in some aspects of its business, but considers it a significant customer on the other. It also boasts another key difference: Its business is designed to be more like a software as a service company.

Food delivery, but make it SaaS, basically. In filing its initial public offering last month, Olo gave investors an idea of ​​the advantages most food delivery platforms have yet to achieve on a sustainable basis. Even DoorDash, which increased revenue by 226% in 2020, is still losing money for the year. But Olo says it generates more than $ 3 million in net revenue in 2020 from revenue growing at less than half the rate of leading US food delivery platforms.

However, it is not clear how easily the profits can be recovered. Unlike typical SaaS models, where the business has significant visibility into future revenue thanks to up-front paying contracts, Olo calls itself a “transactional SaaS” model, where revenue comes not only from subscriptions but also from costs per transaction. This last source of income is important because it now forms the majority of its business: Although Olo says less than 7% of its revenue came from transactions in 2018, that percentage is growing to nearly 57% in 2020.

That mix of businesses alone should make SaaS investors bite their fingers. But things become even more uncertain when you consider that food delivery platforms that hope to see a significant moderation in their pace of growth over the next year are some of Olo’s biggest customers. According to its filing, Olo provides DoorDash access to its order fulfillment, aggregator and channel management solutions. Transaction revenue from DoorDash accounted for at least 19% of Olo’s overall top line last year, up from 2.6% in 2018.That likely means the DoorDash pandemic-driven business boom was a key factor in Olo’s ability to turn a profit – Olo lost money in two the year before 2020.

Slows down growth not the only risk associated with DoorDash. Olo also disclosed in his public offering that his party was being sued by the company, which alleges a breach of contract related to fees. While Olo said the allegations were baseless, the more than $ 7 million DoorDash was seeking would be insignificant if given. Furthermore, the lawsuit could threaten to injure what is clearly a significant financial relationship for Olo.

Demand for food deliveries has surged amid the pandemic, but restaurants are struggling to survive. In a highly competitive industry, delivery services are struggling to gain market share while facing increasing pressure to lower commission costs and provide more protection to its workers. Video / Photo: Jaden Urbi / WSJ

Olo may be the newest food trading technology company to hit the public market, but it’s nothing new. Preceding DoorDash, Uber Eats and even Grubhub, the company says its name actually stands for “online ordering,” which in the dial-up era used to be three words.

Olo started his business long before, sending text message orders to printers before the world owned iPhones. Investors must now wonder if it has taken a front on its own.

Write to Laura Forman on [email protected]

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Cyberpunk Lesson 2077: Making Big Games Is Never More Difficult | Instant News


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Microsoft took over the cloud in 2020 and soared to the sky. Expect more benefits. | Instant News


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Why Facebook’s Oculus Quest VR hardware is worth watching | Instant News


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TikTok, Bracing for Oversight in Australia, Seeks to Reassure Members of Parliament | Instant News


TikTok, a short-lived video application run by Chinese tech giant Bytedance Ltd., has written to Australian politicians to reassure them about user data security and independence, as concerns about China’s application ties grow.

Seeking to allay fears about state interference on the application, Lee Hunter, TikTok’s general manager for Australia, wrote in a two-page letter emailed to lawmakers that he was trying to correct records on “a number of false claims” made about TikTok’s application and that ” out of tune with …

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