Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 8
I bought some at $31.
Too high, imo, so just a 2% allocation.
I am hopeful that this one, like a lot of IPO's, stagnates for a while and maybe can get at/near/below this price a few months down the line.

$100m rev in 2020 (was 95% growth or so y/y)
OLO stands for Online Ordering.
The key, for me, is that they are 100%-focused on restaurants now, but could branch to grocery stores and other verticals over time.

They benefitted from covid, but have been building their business for years.
The mgmt and spirit of the company has a TTD feel to it...not talking about the TAM, but rather that you have a smart mgmt team, a profitable company already even at smaller rev base, and off-the-charts metrics per this eye-popping article. Check out all the charts.,q_auto:good,fl_p...,q_auto:good,fl_p...

"Solving for that — and putting control of the customer relationship and aggregator commission back in the pockets of the restaurant is the essence of Olo’s new integration with Google. Consumers can order directly from Olo-partnered restaurant brands across Google Search, Maps and Google Assistant with a couple of quick taps. Glass emphasized that this new capability gives restaurants a direct transaction opportunity from a consumer searching for their restaurant along with an easy way for the consumer to import their payment details and delivery information. Olo’s digital ordering platform also connects restaurants to its dispatch network — that entire experience also means they can offer delivery via application programming interface (API) connection to a third party operator instead of having to either build in-house function, or rely on the marketplaces. More streamlined and less friction, he said, means bigger and more frequent basket sizes — as well as more profitable ones since restaurants don’t pay 30 percent of that sale to an aggregator. "

"So, the restaurants of the world — or the third places of the world — need you now more than ever, and you can benefit them by ordering from them directly, whether that is in-person, by phone or through the restaurant’s own website or app that you can find by searching for the restaurant and going to its website. They need you to order direct. If you can imagine a future in which you have table-service restaurants and third places to return to, I don't believe it's ever been more important to support them with your direct business through takeout and delivery as they go through the winter."
"Feroldi: Yeah. They are focused on the enterprise. What differentiates this company in my mind is that they're actually a SaaS company. They're approaching it from a software model and they've primarily focused on enterprise-level restaurants. We're going to get into that. But this company has already signed up 400 restaurant brands to their name and many of these listeners have ordered from and know. I mean, I'm talking Five Guys, Shake Shack, Chili's, Wingstop, Applebee's, Cheesecake Factory, Dairy Cream, Peet's Coffee, Jamba Juice, Jimmy John's, Cracker Barrel, and on and on. They have done a fabulous job establishing themselves with these really big name restaurants."

So OLO doesn't compete against their own clients.
Again - this is the "TTD feel" I meant earlier, in that they are enabling their clients without trying to compete like UberEats or Doordash that look to drive eyeballs to their sites/apps, and then charge more (annoying middle man). Basically I feel like rooting for these guys, which makes me feel better about investing at a richer multiple.

Their S1 here:

Print the post Back To Top
No. of Recommendations: 0
a little cnbc love:

The company priced shares at $25 per share, raising about $450 million at a valuation of $3.6 billion. Olo had initially said that its target price was $16 to $18 per share, before raising it to $20 to $22 per share on Monday. The stock is trading on the New York Stock Exchange under the ticker “OLO.”

“For us, we are so well known within the restaurant industry but so unknown outside the restaurant industry, certainly by public investors, so it’s important for us to meet with as many investors as we could,” CEO Noah Glass said in an interview.

Before the initial public offering, Olo had raised less than $100 million in funding from outside investors since the company was founded in 2005. That stands in stark contrast to other restaurant tech companies, like DoorDash, which raised $2 billion before it went public in December.

Glass said that the higher profile of being publicly listed could help Olo grow beyond large chain restaurants into working with smaller eateries or even working with grocery or convenience stores.

The surge in online restaurant ordering during the coronavirus pandemic helped Olo turn a profit of $3.06 million last year, according to regulatory filings. In 2018 and 2019, the company lost money.

In 2020, net sales nearly doubled to $98.4 million. Olo’s revenue comes from the subscription fees it charges restaurant chains like Shake Shack and Brinker International’s Chili’s for access to its digital ordering software, as well as transaction fees for delivery orders.
Print the post Back To Top
No. of Recommendations: 0
video with CEO Noah Glass today, to give you a feel for their founder/leadership:

Stated orders on their platform grew something like:
2017 50m
2018 100m
2019 200m
2020 500m orders (accelerated due to covid bump)

But was already growing fast, from a platform usage perspective.
Could see them having tough y/y comps later this year, but growth will hopefully still be very solid into 2022 and beyond.

Print the post Back To Top
No. of Recommendations: 1

Another video with CEO via the CNBC Squawk on the Street

digital ordering for restaurant dining is new due to covid...QR codes at your table, etc...
pre-covid, takeout or off-prem was already over 35%+ of restaurant industry revenues...that is where they focus, on digitizing the drive-thru, takeout, order-ahead, etc...

so many good brands they support that I know and love: five guys, portillos

Not a "take-rate" product.
Restaurant pays a fixed fee per location/per transaction via their SaaS model.
Restaurants get to maintain client data and direct-to-consumer relationship, versus if they use an UberEats or Doordash.

Print the post Back To Top
No. of Recommendations: 1
Olo provides SaaS software.
So the 3-year is fairly common, and is just renewed year-to-year after that.

The software powers the delivery/takeout and potentially in-restaurant digital ordering experience of that restaurant.

Then they integrate if/as needed with 3rd parties like an UberEats:

"Uber Eats Partners with Olo to Simplify Third-Party Delivery for Thousands of Restaurants
Partnership brings direct POS integration with leading restaurant brands, adds operational ease by eliminating need for separate ordering streams

June 26, 2019 09:00 AM Eastern Daylight Time
CHICAGO & NEW YORK--(BUSINESS WIRE)--Uber Eats today announced it has partnered with Olo, the leading digital food ordering platform for the restaurant industry, to integrate directly into the point-of-sale (POS) of leading restaurant brands via Olo Rails. An important distinction for restaurant brands, this partnership allows orders placed by consumers on the Uber Eats website or app to be injected directly into the order stream at the restaurant, drastically improving order accuracy and operational efficiencies for restaurant operators."

Other integrations, via Google:

"“Hey Google, add a side of fries to that order.” Fries added, just like that, thanks to digital food ordering platform Olo, which announced this week that it has partnered with Google to enable customers to order directly from restaurants across Google Search, Maps and the Google Assistant. The integration allows Olo’s network of more than 70,000 restaurant brand locations to be enabled on Google’s platforms so that consumers can order directly on Google from Search and Maps."

"Rails, Olo’s platform that enables restaurants to process orders originating from third-party destinations, is now integrated across Search, Maps and the Google Assistant, transferring each order directly into the restaurant’s point of sale and ordering stream with the goal of improving operational efficiency as well as the guest experience.

It’s a big step for Olo in the fast-growing online food delivery space. Adroit Market Research predicts that the industry will reach $116 billion worldwide by 2023. Brands working with Olo stand to benefit from more accurate pricing, menu, and product availability. Inbound orders are automatically placed into existing POS systems. For restaurant operators, Rails removes the need to manage multiple tablets on the restaurant counter and disparate order flows. This integration should help reduce lag, increases order success rates, and enables faster and more accurate ordering experiences.

The integration also presents an increased competitive threat to food delivery services. That’s because the Olo platform enables restaurants to offer delivery and pickup services to customers directly without having to go through an external app. This means restaurants can maintain full control of their brand identity.

Oak Brook, Illinois-based Portillo’s Hot Dogs, with 60 locations, is one of the first restaurant groups in the country to deploy the new integrated technology. Customers can use the search results page online to order food. They can also order from Google Maps and Google Assistant. “Our team takes great pride in making the ordering process as seamless as possible,” said Nick Scarpino, Senior Vice President, Marketing & Off-Premise Dining at Portillo’s Hot Dogs. “his integration enables guests to place a direct digital order more quickly than ever.”

Portillo’s began offering delivery two years ago. The restaurant chain now allows customers to order through its own app as well as other food delivery apps like Grubhub and DoorDash."
Print the post Back To Top
No. of Recommendations: 2
Was doing a search on TMF for articles tied to OLO.
Interestingly the search results showed "Olo" that popped up in the articles of other companies.

Some Olo history, via TMF:

2013 - Domino's article

"Noah Glass, founder of OLO -- an online and mobile ordering firm -- states it bluntly, "Smart restaurants will evolve to meet changing consumer needs with mobile ordering and payment experiences."

The benefit of "digital sales" is two-fold. Customers can order a pizza without making a phone call; a pizza can be fully ordered and paid for through a mobile device or computer. Less hassle to order equals higher order frequency. This helps Domino's employees concentrate on completing orders in a timely manner, saving time and money for Domino's.

Smartphones now make up 60% of all mobile phones in the U.S., and the rest of the world is following suit digitally. Mobile ordering is the direction the pizza market is heading, and Domino's has the employees and infrastructure to capitalize on this movement."

I like seeing the Founder/CEO of OLO was on top of upcoming trends 8 years ago.
This is not a brand new start-up...this company started at same time as Shopify.

2018 - Chuy's Holdings ER CC Transcript

"On the technology front, our partnership with Olo to create a robust online ordering system is progressing well. We are currently expecting to test the system in the second quarter and plan on completing systemwide roll-out by early in the third quarter.

Early feedback has been tremendously positive and we look forward to using our online ordering platform as a stepping stone for the introduction of new loyalty program in the future. Turning to catering, our test in Nashville, Dallas, and Houston markets continue to perform well and we are now considering additional markets or possible expansion during the next year."

I like how Olo's solutions were so well-received here, and helped fuel expansion. As Olo's clients do well, Olo can continue to do well.

2017 - Facebook article

"The company notes that people often turn to Facebook looking for social recommendations from friends and family regarding what to eat, and Facebook has an opportunity to streamline this process by integrating ordering directly into the platform.

To partner or not to partner, that is the question
It's important to point out that Facebook isn't processing these orders directly, but instead partnering with existing food ordering services like, DoorDash, ChowNow, Zuppler, EatStreet, Slice, and Olo, as well as some popular chain restaurants. "

Obviously Olo isn't only name dropped above, but I like that they appear to be integrated everywhere...Google partnership, here with Facebook, with the delivery aggregators like UberEats. The CEO has referred to them as being Switzerland in this space.

2019 - Cheesecake factory CC transcript(CAKE aka "ZM killer")

"Andy Barish -- Jefferies -- Analyst

Wondering on the DoorDash marketing, is that expected to continue with your relationship? And how -- I guess, how do you guys contribute to that? And then anything else on the marketing side that you're thinking about kind of outside of the delivery room that may help on the traffic front?

David Overton -- Chairman and Chief Executive Officer

So we would anticipate that the current marketing strategy we've employed with DoorDash is going to continue throughout the year. We have some ideas already in place and we work with them on each one of those, whether it's something like that the day of 40,000 slices or some of the things we have coming up for this year or just our days of -- our week of free delivery that happens with the certain cadence throughout the year and we would anticipate that continuing to happen. As far as other marketing throughout the year, we have increased a little bit of our online search presence and we would anticipate doing that throughout the remainder of the year as well.

We see some nice early returns in doing that and we think that it's the way the people are accessing the information about the brand and trying to find out where we are and how to get to us and the most convenient way to order off-premise to-go or Olo. And so that's something we started doing in January and that we like the early returns on that so far."

Again - we see restaurant (client) taking time to call out Olo and we can see "Olo" also being used as a noun/verb, much like Zoom in that "we expect growth with Olo".

2019 - Uber CC Transcript

"We continue to work on improving restaurant onboarding efficiency by reducing friction including point-of-sale integrations through partnerships such as Olo and custom integration via our own APIs. And lastly, we enabled even more ways for restaurants to engage Eats customers through new options like dine-in, pick-up and the ability to use their own delivery personnel."

2019 - Waitr Holdings CC transcript

"On August 6, we activated a partnership with Olo for point-of-sale integration. Point-of-sale integration will not only allow us to access thousands of additional restaurants in our markets, but expose our customers to new brands not previously seen on our platform."

2020 - Brinker International CC Transcript

"More than 70% of our restaurant transactions are coming through Olo, which means the majority of our guests are ordering and paying from their own devices. For the remaining few who pay at the restaurant, we're implementing touchless portable payment in the parking lot. "

2020 - Yext

"Restaurants even found use for Yext during the pandemic. With more people ordering digitally, there was a need for verified menus. To meet the need, Yext partnered with Olo, a restaurant ordering platform used by many top restaurant chains."

While this one below is not TMF, I did want to point out that OLO was discussed as an IPO for 2020 pre-covid. I am sure when covid hit, those plans were put on their business had a surge and they needed to focus on handling that growth.
"Olo provides software for food-ordering services. Its name is derived from “online ordering.” It sells its online ordering software to more than 300 restaurants like Applebees, Five Guys, California Pizza Kitchen, Wingstop, and The Cheesecake Factory. Olo has also partnered with DoorDash and Postmates — two companies with potential public offerings. Public offerings from all three companies this year would pave the way for the hi-tech food delivery companies. Olo aims to use its software to benefit restaurants instead of cutting them out altogether.

Last year, Olo announced it would be working with Alphabet’s Google to allow customers to order directly from restaurants through Google searches, proving further that Olo is interested in becoming a better resource to restaurants. 3 IPOs to Watch for in 2020
Olo isn't unicorn status yet but it has been able to raise around $53 million in total funding. It could potentially raise $300 million from its IPO, putting the company at a $1 billion valuation. "

1b valuation...yeah, I wish.

Print the post Back To Top
No. of Recommendations: 0
Buying opp or reason for pause...will see:

“For more than three years,” DoorDash said in its filing, “Olo has overcharged DoorDash — inflating its own revenues by collecting from DoorDash tens of millions of dollars more than what DoorDash should have paid.”

While a minnow compared with the food delivery giants, Olo holds a unique position in the sector in that it is profitable, posting net income of $3.1m in 2020 on revenues of $98.4m.

The company disclosed the legal fight in its S-1 filing ahead of its IPO, stating that DoorDash was seeking “damages in excess of $7.0 million”, but offering no further details. Olo said in the filing it felt the lawsuit was “without merit”.

Olo could not be reached for comment ahead of publication.

In its motion to dismiss the case, filed in February, Olo argued that a November 2017 addendum to the DoorDash contract had nullified the clause promising it would always receive the lowest fees, and that Caviar — a delivery service focused on high-end restaurants — could not be considered a competitor to DoorDash.

According to company filings, DoorDash was Olo’s biggest delivery partner, responsible for 19.3 per cent of the company’s total revenue in 2020. The current contract between the companies runs until at least March 2022.
Print the post Back To Top
No. of Recommendations: 0
I bought a bit.
Still expensive, but cheaper than when I first looked at it.

If they can do 50% growth this year, that puts them at a forward P/S of about 25, for a sub-$4b company.

DoorDash is concerning as what happens in 1 year when current contract runs out...will there be bad blood?

I take the lawsuit as overall bullish, because why does a very large semi-competitor sue the little up-and-comer, except that perhaps they have something to fear longer-term?

Print the post Back To Top
No. of Recommendations: 0
TMF new articles on OLO:

Getting the ordering process right is crucial. A Salesforce study found that 50% of consumers will switch brands if a restaurant's digital solutions are not meeting their needs. When a company chooses Olo, it hopefully has prevented this problem from happening, which should keep customers happier and more likely to come back and order from that location again.

The business is growing rapidly
Olo's business has done quite in the lead-up to its market debut. Gross merchandise volume (GMV), which is the total amount of dollars flowing through Olo's platform, has nearly doubled each of the last five years. To put that in perspective, in 2014 Olo surpassed $100 million in cumulative GMV. In 2020, that number hit $14.6 billion.
Print the post Back To Top