A lot of startups pursue a general focus, aiming to reach as many segments of the public as possible. But, it is certainly not the only possibility for businesses and, founded by a pair of childhood friends, London-based Velocity targets a more affluent user base with an app that allows users to see what they have already spent during trips to the club and earn points that they can cash in for rewards.
Velocity is targeting users at two points: during the meal and afterwards, helping restaurants to lure their customers back. The app works by letting users check in to a venue (and having them tell the waiter that they’re with Velocity) and then access the bill in real-time, paying through the app when you are finished. It doubles as a rewards service, allowing users to earn points and advance levels, which bring benefits. Velocity is keeping their total number of users private for the time being, but would say that they are attracting “thousands of new customers every week” and increasing the number of transactions that they process by 20% week-over-week (including roughly 33% from repeat customers). Velocity adds that they generate revenue by charging restaurants a small subscription fee for payment processing and access to a CRM and analytics dashboard.
Velocity had operated with the help of a solid amount of external funding, claiming $1.3 million from the founders, advisory board, and extended network, but they really grabbed attention this week with the announcement that they have pulled in another $12 million in a Series A round from Initial Capital, ex-Thomson-Reuters CEO Tom Glocer, Chrystal Capital, and Shukri Shammas. Boosted by this latest round, the startup intends to ramp up their growth efforts, going from the current 300 venues to “thousands” across major cities in Europe, North America, and Asia by the end of next year. Velocity has already opened an office in New York City and says that they plan to use that as a launching point for their service in the American market.
In terms of competition, the Telegraph has reported that restaurant-booking platform OpenTable, which launched in 1998 and operates throughout the U.K. has begun to test pay-as-you-go services in several American cities, while “personal dining concierge” Reserve plans to jump into the London market in the near future. Other pay-as-you-go services, like TabbedOut, Dash, and Cover have sprung up in the United States, but they appear to be focused on the American market for now. These services may not specifically cater to the affluent users that Velocity covets, but they represent competition, nonetheless.