Japan is a strong market for incorporating technology into the food consumption experience, and now one of the startups leading this idea is attracting investors from across the ocean. Dinii, which allows you to order food from restaurants and shops through a mobile platform, has raised $48 million (7.46 billion yen). Bessemer Venture Partners and Hillhouse Investment Management led the investment, with participation from Ecelectic and Flight Deck Capital. Notably, this is the first time Bessmer has invested in a Japanese startup.
Mao Yamada (CEO) and Kazuki Otomo (CTO) founded Dinii in 2018 after working part-time at restaurants to earn money for their tuition while studying at the University of Tokyo, and realizing how outdated restaurant ordering and delivery systems were.
Dinii originally emerged as a B2B SaaS business. The duo got a foothold in the market with a low-cost, cloud-based POS platform that restaurants could use on phones and other devices they already owned, so potential restaurant customers who already had thin margins didn’t have to buy special devices or other equipment. Now Dinii wants to build on that momentum by expanding the financial services it offers to customers, Yamada told TechCrunch.
“Because we already have a cloud-based POS platform, we believe we can expand into more product services, such as employee management, (restaurant) reservations and (food) delivery,” Yamada told TechCrunch.
Dinii was inspired by Toast, a US cloud-based restaurant management system that also started out as a POS and payment service (and had Bessemer as an early backer), but Yamada says he has yet to come across a company in Japan with similar capabilities to Dinii (data and financial services for restaurants).
“We have been fortunate to be a lead investor in Toast in the US, helping the company become a $13 billion company, and we believe Dinii has similar ingredients for success: a strong team led by a young, visionary leader, a large underserved market, and a best-of-breed all-in-one cloud-based solution,” said Brian Wu, Partner at Bessemer Venture Partners. “We are confident that Dinii will emerge as one of the most prominent SaaS and fintech leaders in Japan.”
The Tokyo-based startup is rolling out a cashless payment solution called “Dinii Payments” that it hopes to develop into a larger financial services product for its customers. “By first offering a cashless solution, we can eventually expand into back-office operations such as bill settlement, inventory management and payroll,” Yamada said.
Another big focus is serving restaurant workers on Dinii’s platform, many of whom work part-time, Chan told TechCrunch. “For example, they might be students who don’t have stable jobs and have low credit scores,” he said. “A lot of times, they can’t wait until the end of the month to get their paycheck. They’d probably like to be paid daily, but that’s not possible right now.” One way Dinii plans to do this is by introducing daily pay for an additional fee.
Other areas the company hopes to expand into include insurance, asset management and lending to help restaurants manage their cash flow and expand their business.
Most restaurants in Japan primarily use in-store POS systems, meaning traditional restaurants partner with companies like Toshiba or NEC to rent in-store POS systems for basic operations. These are expensive, have limited functionality and don’t quite cater to modern demands like ordering from mobile apps, paying with QR codes, cashless payments and cloud-based customer relationship management tools, Yamada says.
“By deploying the POS system on the cloud, Dinii’s clients, which include a wide variety of restaurants from small businesses to large corporations, can provide instant functionality and collect customer data through mobile ordering. Dinii’s technology allows restaurant owners to know which menu items are popular, communicate with customers through their CRM (customer relationship management) system, and send customized coupons to consumers, ultimately increasing revenue,” Yamada explains.
Dinii also leverages an integration with the popular messaging app Line, allowing local restaurants to collect customer data such as preferred menu items, gender, previous visits and number of visits.
The Japanese startup makes money in two ways: from software subscription fees for its cloud-based POS system and fees for payments made through its cashless platform integrated into the POS system.
Japan has more than 900,000 restaurants, and the domestic food and beverage services market is projected to grow from $214.35 million in 2022 to about $475 billion by 2030. Currently, Dinii operates about 3,000 restaurants across Japan, which represents a penetration rate of just 0.5%, so there is significant upside potential, Yamada noted.
“With over 20 million (registered) users ordering meals from over 3,000 restaurants, you can imagine the amount of data traffic passing through Dinii’s platform every second. Without going into too much detail, we are currently building out our own data solution capabilities that will benefit restaurants in the future,” Yamada continued.
The Tokyo-based startup also has operations in Osaka, covering the country’s two largest restaurant markets, but with the new capital as a catalyst, it plans to expand to other Japanese cities such as Nagoya, as well as Southeast Asian countries such as Indonesia, Malaysia, Singapore and Thailand. Dinii’s headcount has quadrupled from 30 to 130 in 2022, and it plans to hire more as it expands geographically.
The startup has raised ¥8 billion (approximately $55 million) since its inception, with previous investors including ANRI and Coral Captial.
