Small businesses are the lifeblood of our economy. There are 32 million small businesses and over 400,000 independently owned restaurants in the United States serving nearly all Americans in some way. U.S. consumers spend $5+ trillion per year at retail and restaurants, but even with these staggering numbers, most of these businesses operate with legacy technology that is outdated and clunky, or have no backend software platform at all. We believe a rapid technology replacement cycle is underway, offering a nearly $200 billion revenue opportunity as the ~80% of restaurants and 90+% of retail locations using legacy solutions transition to modern, cloud-native solutions.
SpotOn is at the forefront of this transformation, empowering small businesses through modern technology to help them compete and win in the market. SpotOn offers an end-to-end, cloud-based tech stack for small business owners, including software to help process payments, market the business, pull reports, manage customer loyalty programs, manage customer reviews, and much more. SpotOn has significant advantages over legacy solutions, offering modern systems with features that allow SMBs to better serve their customers including online ordering, multi-location, and basic CRM solutions. Furthermore, the company is truly client-first with its sales and delivery model. They hire sales representatives from big coastal cities and small towns across the country to provide local, personalized support to all kinds of businesses, from the local diner, to the hair salon, to the plumber.
Despite extraordinarily challenging conditions for small businesses over the last 15 months, SpotOn has more than tripled their business from pre-Covid to today. They made the right decisions for customers and future growth during the pandemic, including waiving fees for businesses required to temporarily close down, increasing their customer service offerings, hiring through the crisis, and shipping 400 product features and enhancements. And it’s paying off with happy customers and rapidly increasing new customer growth.
As investors, we often come across companies that build great products, companies that develop great sales teams, and companies that offer first-class customer service. But it’s rare to find companies that execute well on two out of three, much less three out of three. But SpotOn does all three, and that is what has propelled its rapid growth. The company is growing 3x year-over-year. They serve over ~30,000 customers, with strong cohort retention and a restaurant app rating of 4.7/5 stars. Additionally, SpotOn customers enjoy in-person installation, 24/7 personalized support, and less than 2 minute customer support wait times.
Most importantly, Zach and Matt Hyman are uniquely suited to build SpotOn into a massive, market-leading company. They are identical twin cofounders who know how to build and scale teams, and are committed to serving and winning for their customers. They are scrappy, and in the early days of the business even had the conviction to fund the company entirely themselves. Alongside Zach and Matt, their cofounder Doron sets the product vision that has translated to delight among their customer base, and RJ serves as Chief Operating Officer, running the organization as a tight-knit and hard-charging team.
We are excited to partner with Zach, Matt, Doron, RJ, and the SpotOn team to build the leading software and payments platform for small businesses!