Tech in Asia: The profitable F&B SaaS firm that got Ant’s attention

The profitable F&B SaaS firm that got Ant’s attention

Tech in Asia
5 Dec 2022

In what way are Burger King in Singapore, Genki Sushi in Hong Kong, and Jollibee in the Philippines the same? Besides the mass appeal, these restaurant chains bank on the services of Aigens, the Hong Kong-headquartered food and beverage (F&B) SaaS firm.
The company has just raised US$14 million in a series A round led by Ant Group. Velocity Ventures, Phillip Private Equity, and Prizm Ventures also participated in the round. While most businesses are scaling back due to recent recessionary winds, Aigens is accelerating its expansion in the Asia Pacific, including setting up a regional office in the Philippines. “If we can serve Jollibee (a popular local fast-food chain) remotely, imagine the potential if we actually have someone on the ground,” says Hans Paul, co-founder and CEO at Aigens.

Last year, the SaaS startup was one of the first two investments for a new fund by Velocity Ventures, a travel and hospitality-focused VC firm. Founded in 2012, Aigens had never raised funding before. “We never had to raise money because we have always been profitable,” says Paul. The restaurant tech firm’s series A raise is a reflection of the times: Since the advent of Covid-19, digitalization has turned into a must-have for restaurants, says the CEO. “We see the opportunity to aggressively expand owing to this surge in demand. Fundraising is a way to accelerate this growth.”
Plans for this expansion come against the backdrop of promising numbers. “We grew from less than a thousand outlets to 4,000 outlets in just two years. This exponential growth has convinced us that there is so much potential in both the industry and the APAC market,” says Paul. Besides strengthening its presence in the Asia Pacific, Aigens is also making the most of its opportunities. After restaurant chains, it’s now signing up hospitality groups as clients. And a new partnership with Alipay+ D-store – which provides a suite of tools to digitalize businesses – could just be its route to newer fortunes.

An engineered approach to profitability
Aigens offers omnichannel ordering solutions for the F&B industry. It says it was the first to introduce QR code ordering technology – also known as bring your own device (BYOD) – to Hong Kong, Singapore, and Malaysia in 2017, and kiosk ordering features in 2012. Founded by Paul and Peter Liu – both engineers by education – Aigens first hit HK$2.1 billion (around US$269 million) in gross merchandise value in 2016. In early 2020, it announced it had processed 41 million transactions for the previous year, a record high that was up 146% from 2018.
The company now processes over US$1 billion in GMV and 140 million orders annually. “Our number of outlets as well as GMV has grown 4x in the last two years,” says Paul. He adds that the company is financially healthy, though he didn’t share more details on the subject. The firm’s profitability, the CEO says, is partly because of the segment it operates in. In many instances, those in the restaurant tech space start with catering to SMEs and then go upstream when they realize that it’s hard to monetize from these firms. “But we never had to burn through marketing dollars or spend a lot on hiring because we built things keeping enterprises in mind. Enterprises are also usually financially healthy, meaning they would pay us,” he says. “This is why we’ve always been profitable.” Besides its QR code technology and self-ordering kiosks, Aigens also processes orders that were made on a restaurants own app.
While a combination of factors have worked in the SaaS firm’s favor, Covid-19 has played a significant role in the adoption of solutions like BYOD, and hence also in the rise of firms like Aigens. For instance, the availability of BYOD options has allowed restaurants to work with fewer employees, especially at a time when most restaurants are still recuperating from the loss incurred due to pandemic-related restrictions. When the pandemic hit, the presence of delivery partners also shot up as diners began ordering from home. “A lot of restaurants didn’t know how to handle that from an operations standpoint. They had three or four devices – all for different delivery platforms,” says Paul. Overreliance on these delivery services also meant that the establishments lost direct contact with their customers.

Pandemic-proof, recession-ready
Aigens has a number of fast-food chains on its client list, including Starbucks, Pizza Hut, and Shake Shack. “We actually started with the chains first because they have the capital resources and are usually trendsetters,” says Paul. When the pandemic kicked in, small businesses suffered more than the chains. Now that markets are opening up, Aigens is noticing increased demand from smaller businesses too. “We can work fast to get them onboard because we have the technology ready and the capital too.” For most industries, the optimism surrounding the new normal is quickly giving way to fears around the recession, especially with mass layoffs in tech. But regardless of the economy, people are still eating at casual or fast-food restaurants, often choosing these over fine-dining establishments during downturns. This relatively robust dining segment makes up for a bulk of Aigens’ clients. “The industry we are in is recession-proof,” says Paul.

The company’s clientele is set to grow bigger as the firm expands its reach in the service industry. “There’s been a lot of interest from hotels, and we’ve been able to sign clients quickly,” the CEO shares. The company has now picked up several hotel chains as customers, including Hyatt, Accor, Mercure, and Sofitel, to name a few, by offering them software for room service, among other things. This is because at the height of the pandemic, with travel at a standstill, hotels were still running their F&B units. Some signed up with Aigens to counteract the effect of staff crunches. Part of the company’s plan for 2023 is to grow aggressively in the hospitality industry while also focusing on the research and development of technology. “One thing I’ve learned is that you can never change the market,” says Paul. “But if you can catch where the market is going, that’ll save you a lot of money.”

Many reasons not be Ant-sy
The company’s headcount has already doubled from 2020, now adding up to 120 employees. A part of the funding it’s raised will also be used to get more people on board across Southeast Asia, including for marketing-related roles. Currently Aigens sees potential in Thailand, Malaysia, and the Philippines in particular, because of the high penetration of smartphones and mobile wallets in those countries. In keeping with its long-term approach, the firm is also optimistic about the potential of its recent collaboration with Ant. Aigens is acting as an accelerator of sorts for the Alipay+ D-store project and is standing in as a plug-in for F&B businesses who set up digital stores through the Alipay+ initiative. “These businesses need different types of management tools and integrations, like connecting to different kinds of platforms, etc. We can accelerate the growth of these digital stores and in exchange we can also get introduced to a larger merchant network,” says Paul.

Aigens could also benefit from Ant or Alibaba’s technological know-how and their knowledge of China, which is a relatively mature market. But with investors being bullish on SaaS, the competition for Aigens is likely to heat up. For instance, upstarts like Singapore-based Klitkit is going beyond software and rolling out partnerships with creators and consumer brands to launch limited edition, delivery-only food brands. That said, Aigens prides itself on how it doesn’t get swayed by what others in the industry are prioritizing. Instead, it chooses to chart its own course. Why fix something that isn’t broken? Paul compares the subscription model Aigens uses to a cell phone plan: There’s a fixed set of minutes available that one can use and if they exceed that, Aigens charges a fee on top of its subscription price. This model means its own revenues are independent of how well a client’s business has done. While this makes the revenue “pretty predictable,” as Paul puts it, this also means there’s less risk involved for Aigens.

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