Pre-Series A Round Investment in funfo, a Free-to-Deploy Mobile Ordering App for Restaurants
Genesia Ventures, Inc. has made a follow-on investment in funfo, a company providing mobile ordering app for restaurants, which can be deployed starting from 0 yen. The investment was made from Genesia Venture Fund No. 3 (GV-3).
funfo is an iPad application that enables restaurants to use mobile ordering and POS cash register functions that is free to deploy. From self-ordering to customer payments, menu editing, takeout support, and sales management, all these features are available in a single application for restaurant managers and staff.
The application is designed to be simple yet highly functional. It can be used in a wide variety of settings, from individual restaurants to chain establishments, and across diverse business categories. It’s suitable for urban centers, remote islands, izakayas (Japanese style pubs), and cafes.
Challenges and Prospects for the Restaurant and Food Service Industry
The environment in the restaurant and food service industry continues to be challenging.
By 2023, despite the COVID-19 situation improving and dining out becoming more common, Japan has experienced several changes. These include rising costs of electricity and raw material due to a weak yen, the introduction of the New Invoice System (qualified invoice storage method), and an increase in the minimum wage.
In addition, due to the revision of laws and regulations in 2024, restaurants are concerned about adapting to the electronic system and the potential increase in costs and operational burdens. Starting January 1, 2024, all businesses will be required to comply with the Electronic Bookkeeping Law after its revision. Furthermore, from October 2024, the Pension System Amendment Law will apply and the scope of social insurance coverage will expand to include companies with 51 or more employees. This means restaurants which were previously exempt will now be obliged to comply.
According to Tokyo Shoko Research (2023/09/07), the number of bankruptcies (liabilities of 10 million yen or more) in the restaurant industry reached 569 between January to August 2023 — up 82.3% year-on-year — compared to 312 in the same period last year. By August 2023, the number had surpassed the total for the year 2022 (January-December) at 522. In 2020, at the beginning of the COVID-19 pandemic, bankruptcies in the restaurant industry surged due to the loss of inbound demand and other factors. Subsequently, bankruptcies were significantly curbed due to the generous financial support provided in response to the pandemic.
However, as COVID-19 was reclassified to a Class 5 infectious disease and support measures were terminated or scaled back, the number of bankruptcies in the restaurant industry once again saw an increase. The home-delivery food and beverage business, which thrived during the pandemic and saw many new entrants, saw an approximately three times increase to 41 cases, compared to the 14 cases in the same period the previous year. The number of take-out food and beverage businesses also increased by about 2.5 times to 27 cases, compared to the 11 cases in the same period last year. This is set to reach a record high in September, exceeding the 28 cases in 2013 (January-December).
Tokyo Shoko Research Inc.
Special Site for Electronic Bookkeeping System
Ministry of Health, Labour and Welfare, Special Site for Expansion of Social Insurance Coverage
Background of Funding
To improve funfo, the company has taken into account user feedback. In just the past year, they’ve updated the system more than 100 times, implementing more than 50 new features and specifications. Thanks to these product enhancements, the service has been adopted across a broad spectrum of industries and business categories.
Moreover, they have established partnership agreements with LINE Yahoo Japan Corporation (formerly LINE Corporation) and Square Inc. to improve convenience by offering data linkage and payment options.
They believe that funfo will play a significant role in the restaurant industry, and will continue to offer “mobile ordering that can be deployed starting from 0 yen + POS register + handy” as infrastructure for restaurants. Its goal is to create a world where mobile ordering is the norm.
Koki Mizutani, Investment Manager, Genesia Ventures Inc.
Given the strong positive reception of funfo’s solution, which offers the convenience of mobile ordering to a large user base daily through its highly developed products, we are delighted to lead this funding round, as we did in the last one. Dining at a restaurant that used this service, I was particularly impressed by the staff’s appreciation of the product. As a leading DX company in the food and beverage industry, we’re excited to partner with funfo in their journey.
Company Name: Funfo Inc.
Date of Establishment: October 09, 2020
Location: 622-1-402 Saraya-cho, Shimogyo-ku, Kyoto, Japan
Representative: Qiao Heng Yue