Australian table-ordering powerhouses Mr Yum and me&u have agreed to merge, joining forces as a downturn in consumer spending rattles the venture’s restaurant and cafe clientele.
Mr Yum and me&u, who have battled each other for dominance in the QR-code table ordering market since both companies launched in 2018, on Thursday confirmed an all-stock merger.
The deal is set to combine Melbourne-based Mr Yum and Sydney’s me&u into an entity covering over 6,000 venues in Australia, New Zealand, the UK, and USA.
Kim Teo, Mr Yum co-founder and CEO, will take the CEO role in the combined venture, while Stevan Premutico, me&u’s founder, will serve as non-executive director.
In a statement, Teo positioned the merger as a fitting resolution to years of rivalry in the sector and months of rumbling about a potential team-up.
“We’re both incredibly excited to join forces with another leader in this category,” she said.
“Over the years of competing in the marketplace, we’ve always had a deep respect for each other and are excited to learn from each other.”
The entity will devote the coming months to new products and features “focused on elevating the interactions between staff and guests”, and marketing tools to help boost diner numbers and revenue, Kim added.
Profitability is achievable in 2024, the statement read, with the entity claiming “significant” cash reserves on hand.
The deal, which represents a significant shakeup to the local restaurant tech sector, comes during a turbulent period for the Australian hospitality scene.
Both Mr Yum and me&u prospered through the COVID-19 pandemic, as the platforms offered takeaway offerings to shuttered restaurants, and QR-code ordering systems through the first furtive months of socially distanced dining.
Each enjoyed significant investment, given the promise of their table-ordering systems to alter hospitality in the long term.
Mr Yum bagged an $89 million Series A raise in late 2021, following an $11 million raise just seven months prior.
Separately, me&u secured a $30 million funding round in December 2022, topping up an $8 million raise it bagged in 2019.
Yet sharply rising interest rates and inflation through late 2022 and 2023 have compressed diners’ budgets, suppressing the post-lockdown boom in hospitality spending.
Mr Yum laid off almost one in five staff in August 2022, before making a further 40 staff worldwide redundant in March this year.
At the time, Teo said the decision was essential to guide the business toward profitability.
Although the merger will conjoin two leading players in the modern hospitality tech sector, more tough decisions are on the horizon.
The new entity’s branding, and whether existing services will retain Mr Yum or me&u branding, is yet to be determined.
“We can’t give any specifics on this as we are still working out these details,” Teo and Premutico told SmartCompany on Thursday.
“Both companies are focused on the same vision of transforming hospitality on a global scale to build a better future for the industry and we are excited to bring the best of both brands together.”
Further changes to the make-up of the freshly conjoined entity are also under consideration.
When asked about the chance of further reduction in headcount, Teo and Premutico said, “As per is standard in mergers, there may be changes to some roles and responsibilities as we work through the integration phases.
“However, any changes to roles or responsibilities will be done via a fair consultation process with both teams.”
But as the hospitality sector grinds through volatile spending patterns, the leadership team is convinced teaming up is what is best for the restaurant-tech players and the enterprises they serve.
“Bringing together the best team, customers, hospitality thought-leaders and investor communities as one drives faster innovation, helping us build a better future for the industry,” Teo and Premutico said.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
