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How Indonesia’s top restaurant management SaaS monetizes in phases

Gunawan-Woen-ESB-restaurant-management

ESB is a leading restaurant management SaaS used by many of Indonesia’s most prominent F&B groups, including Ismaya, Boga Group, and Starbucks, to name a few.

Its platform provides a full-stack solution for restaurants that includes point-of-sale, enterprise resource planning, a mobile ordering system, digital payment services, and more.

Following a US$29 million funding round in August 2022, the startup began offering working capital and expanded productivity features designed to help SMEs increase their sales. It also rolled out order and delivery channel management solutions, accounting capabilities, supply chain management, and a human resources information system. 

Having raised US$39.6 million in total funding since 2021, the company’s co-founder and CEO Gunawan Woen mentioned that ESB has achieved a retention rate of 90%. In a recent podcast, Gunawan spoke with Adrian Li of AC Ventures. Here are some excerpts from the conversation.

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How Indonesia’s top restaurant management SaaS monetizes in phases

The transcript below has been condensed and edited for focus and clarity.

What are the differences between ESB and its global counterparts? What unique problems do local customers face?

We do have a similarity in terms of the focus on F&B and integration. There are mainly two differences between our business models, though.

ESB is a combination of what Toast and Olo do. Toast is very involved in the payment side of things but it does not engage with end customers. It handles SaaS for its F&B customers in the US, while Olo’s application interfaces with merchants and their end customers. 

What were the early problems you solved? How did you see tech coming into play over time?

Specializing in expenses from the profit and loss department, we geared everything into answering just one question that restauranteurs always have: 

‘How can I increase my net profit by reducing costs and improving efficiency?’

All of our products in the initial system were so focused on solving that problem, and that problem only. By itself, this was already a big problem to look at because it involved a lot of functionality and products within the system.

How did you address this specific pain point for restaurants in Indonesia?

We saw that technology could help primarily in integration. A US brand that IPO-ed not too long ago was addressing the same problem: a lack of software built specifically for the F&B industry. 

There was software that F&B companies could use, but it needed to be layered with multiple other pieces of software from multiple vendors to carry out daily operations. This created another problem during integration: high expenses.

There was potential for a lot of manual work to be automated. These opportunities were found in-store, in the back office, in the warehouse, and in the central kitchen. The problem was that there was no single software that could help on all fronts. 

Only big companies can invest in building software from scratch. Medium-sized F&B companies can’t afford to do something like that. They will turn to multiple software vendors for the tech they need. When these vendors fail to provide successful integration, mid-sized F&B companies have to fall back on manual work.

When starting up, did you see other competitors out there, other platforms that were similar to yours?

When we started this company, we actually did not think about the competitors or the market. The main reason we did this was that it was just what we wanted to do. From there, we figured out that there was no apples-to-apples comparison that existed when it came to what ESB was addressing. Part of the reason ESB is unique is that Indonesia itself is a unique F&B market. All these things remain true today.

How do you see ESB scaling up in terms of revenue? We know SaaS in Indonesia, especially those tailored for local SMEs, have a pretty low revenue ceiling. So how do you build a gigantic business out of this?

This ties into the way I’ve always done business. I like to separate monetization into two phases. In the beginning, the first phase was based purely on the SaaS subscription, but we knew that to scale this up in Indonesia, a subscription model would not be the end game. This led us to where we are now.

In the second phase, the SaaS is merely a hook that brings us to the actual F&B transactions, which is the part that we monetize. Phases three and four of monetization are coming, but I cannot talk about them yet.

Enjoy the full episode for free on SpotifyGoogle, and Apple.

How foodtech startup ESB onboarded Indonesia’s F&B giants

See also: How ESB used human touch to hit an apex in trying times

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