Melbourne: A Hotbed for Hospitality-Tech Innovation

June 6, 2024

Renowned as one of the world's food capitals, Melbourne's vibrant hospitality industry employs 10.2% of the population, boasts 2997 establishments and contributes $7.4 billion dollars to economy. Mix into this cocktail a thriving startup ecosystem and the result is a hospitality-tech ecosystem pioneering industry change globally.

Mr. Yum, now merged with Me&U was founded in Collingwood, and inner Melbourne suburb and CEO, Kim Teo, now holds the accolade of the largest Series A in Australian history for a female founder and was LaunchVic’s 2023 startup of the year. Mr. Yum has overcome the challenge of being a category creator to educate and normalise the adoption of QR code ordering in venues, now having 6,000+ venues in their stable.

TechCrunch article about Mr Yum landing a $65m deal

Another Melbourne-born startup making waves in the hospitality industry is Clipboard. This social media platform allows professionals and businesses stay informed with industry news, foster valuable relationships, and explore job opportunities, kinda like LinkedIn for hospo. With an impressive user base of over 100,000 individuals and 10,000 businesses, Clipboard has helped the entire Australian hospitality industry be more connected.

Clipboard Hospitality co-founders Brendan Leeds and Tipu Sultan (Image credit: Belinda Vitacca Photography

Launched in 2016, EatClub, based in Cremone is another shining light in the Melbourne hospitality-tech space. Eatclub allows restaurants to list last-minute deals to fill their tables at off-peak times. Eatclub boasts 2 million downloads globally and has 1000+ venues onboarded. And yet, another example of a Melbourne company which has gone global.

Credit:EatClub App

Problem space landscape

While many people thought there wasn’t much room for digital disruption in the hospitality space, the more startups that emerge in the space, the more it seems like there is a lot of untapped opportunity. Here are an overview of the problem spaces, founders are explorers.

In-Venue Ordering and Payments

Australia has emerged as a pioneer in the in-venue ordering space, with startups like Me&U (merged with Mr. Yum) and Hungry Hungry leading the charge. Mr Yum’s AUD$89 million Series A funding in 2021 was the largest for an Australian female-founded startup at the time. There have been many Australian startups which has followed suit as Me&U has been expanding to US and European markets.

These platforms have revolutionised dining culture with QR-code ordering is now fairly common practice in Australia.

Mr Yum co-founders Kim Teo, Adrian Osman, Kerry Osborn and Andrei Miulescu. Credit:

Point of Sale (POS) Management

This is another area in which Australian founded companies have thrived. The major Australian players include Impos, H&L Group, Bepoz (Oolio Group) and Doshii. These startups share market share with major US players including Square and Lightspeed.

Sean O’Meara and new Impos CEO, Andrew Paynter. Sean O’Mera is a leading figure in the Australian Hospitality Tech landscape, cofounding both Doshii and Impos and now is an advisor for MUCUDU.

Food Delivery

The meal delivery market in Australia is dominated by major US companies such as Uber Eats and DoorDash. However, local startups are exploring niche opportunities and innovative business models to compete in this highly competitive space.

Loyalty and Customer Engagement

There are a number of global companies offering digital management of loyalty programs for hospitality venues, however most Australian restaurants don’t digitally manage loyalty. Some large hospitality groups have launched in-house digital platforms such as Aus Venues Co. launching Liven and ALH (Endeavour) launching Pub Plus+.

Paul Waterson, CEO of Aus Venues Co. Aus Venus Co. was also an early investor in Mr. Yum.

Table Booking and Reservation Management

This is a space dominated by US and global incumbents like OpenTable, Sevenrooms, and Lightspeed with Australians startups yet to make a significant mark in.

Deal Hunting/ Marketing

Eatclub has been the dominant player in Australia in this space. Part owned by celebrity chef Marco Pierre White, Eatclub boasts 2 million downloads globally and has 1000+ venues onboarded.

Sydney based Mandoe Media has gained significant popularity in the in-venue digital signage space.

With the rise of AI, hyper-personalised marketing in hospitality will play a major role in the hospitality industry. Melbourne based startup MUCUDU alongside Mayfly Ventures is looking to drive this revolution.

Marco Pierre White, Celebrity Chef and Cofounder of EatClub Credit: Eatclub

Mayfly Ventures and MUCUDU

MUCUDU is a platform which bring hyper-personalisation to hospitality marketing. Founded by owners of the Zengal Hospitality Group Zenita O’Neill and James Gallagher, MUCUDU is well positioned to pioneer drive the hospitality industry forward.

MUCUDU launched version one in May 2022 but with limited payment functionality, there were major challenges onboarding venues, patrons and attracting investment. That’s when the founders of MUCUDU engaged Mayfly Ventures to support the MUCUDU journey.

Mayfly began work from the ground up, running user story workshops and reworking the UI to better suit the target audience. We equipped them with a high-fidelity prototype that allowed James to begin onboarding new venues and securing partnerships with the likes of Heineken, Furphy, Lion, Guinness, and Drinksworks.

To solve the payment issue, we took a ground-up approach, developing a custom payment gateway compatible with ImPos (POS provider) and Doshii (Integration tool). Not only do the payments work seamlessly, but by cutting out the middleman we were able to achieve near-zero payment fees on both ends with no costs passed on to the customer or venue owner

After relaunching in May 2024, MUCUDU has now processed $500K in transactions and has 6,000 users.

Mucudu cofounders Zenita O'Neill and James Gallagher with Mayfly cofounders Geo George and Joe Young

Macro Trends Hospitality

The hospitality industry in Australia is experiencing several significant macro trends that are shaping its future. These trends are driven by evolving consumer preferences, technological advancements, and a growing focus on sustainability and responsible practices.

1. Personalisation and Customisation

Consumers are increasingly seeking personalised and tailored experiences that cater to their unique preferences and needs. This trend is driven by the rise of data analytics and artificial intelligence (AI) technologies, which enable hospitality businesses to gather and analyse customer data, providing insights for personalised offerings and targeted marketing strategies. 91% of consumers are more likely to shop with brands that provide offers relevant to them. *Source Accenture

2. Adoption of Contactless and Mobile Technologies

The COVID-19 pandemic has accelerated the adoption of contactless and mobile technologies in the hospitality industry. Contactless check-in, mobile ordering, and digital payment solutions have become increasingly popular, driven by consumer demand for convenience, safety, and efficiency.

3. Sustainability and Responsible Practices

Consumers, particularly younger generations, are increasingly conscious of environmental issues and are seeking out accommodation and hospitality experiences that align with their values and contribute positively to the planet. This trend has led to a growing focus on sustainable practices, such as energy-efficient technologies, waste reduction strategies, and responsible sourcing.

4. Integration of Emerging Technologies

The hospitality industry is embracing emerging technologies like artificial intelligence (AI), Internet of Things (IoT), augmented reality (AR), and virtual reality (VR) to enhance guest experiences, streamline operations, and improve efficiency. These technologies are being used for personalised recommendations, virtual tours, and immersive experiences.

5. Rise of the Experience Economy

Consumers are increasingly seeking unique and memorable experiences over traditional products or services. The hospitality industry is responding by offering curated experiences, such as culinary adventures, wellness retreats, and immersive cultural experiences, to cater to this growing demand.

Industry Factors to Consider in a Go-to-Market Strategy

When developing a go-to-market strategy for a hospitality-tech startup in Australia, several industry-specific factors should be considered:

1. Network Effects and Industry Connections

The hospitality industry in Australia is characterised by strong network effects, where venue owners and industry professionals frequently interact and share information. Building a strong network and leveraging industry connections can be crucial for gaining traction and driving adoption of new products or services.

2. Hospitality Group Dominance

Australia has several large hospitality groups that operate hundreds of venues across the country. Securing partnerships or contracts with these groups can significantly accelerate the adoption of a hospitality-tech solution. However, it is essential to understand the existing technology platforms and initiatives within these groups to avoid pitching a competing product.

Graph - Top 5 Hospitality Groups Image:Mayfly Ventures

3. Vertical Integration and In-House Solutions

Some hospitality groups are developing their own in-house technology solutions, particularly in areas like loyalty programs and customer relationship management (CRM). It is crucial to identify these initiatives and position your offering as a complementary or superior solution.

Hospitality groups and their loyalty programs AVC (The Pass), ALH Group (Monty), Boost (Vibe Club)

4. Regulatory Compliance and Data Privacy

The hospitality industry is subject to various regulations and data privacy laws, such as the Privacy Act and the Australian Consumer Law. Ensuring compliance with these regulations and implementing robust data privacy and security measures is essential for building trust with customers and partners.

5. Proof of Concept and Pilot Programs

Given the competitive nature of the hospitality industry and the potential risks associated with adopting new technologies, many businesses may be hesitant to be early adopters. Offering pilot programs or proof-of-concept trials can help mitigate these concerns and demonstrate the value of your solution.

If you are a founder who has an idea in the hospitality tech space, we would love to hear what you are working on. Mayfly Ventures brings a deep-domain expertise, industry connections and passion to the hospitality-tech industry.

Joe Young

Co-founder of Mayfly Ventures, Joe talks about #product-market-fit #GTM-Strategy #Capital-Raising.

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