This week Ignacio Oroquieta, CEO and CFO of Le Room Service has conducted an interview with Tech Food Magazine, a portal dedicated to reporting on companies in the food industry, providing updated information and analysis on food innovation and food tech.
The article focuses on the 1.4 million euro funding round closed by Le Room Service. With these funds, the company plans to develop new business lines, continue its international expansion, improve its technology platform, consolidate results in its current locations and address its sustainable growth plan within the overall objective of achieving the highest profitability.
With this new round of funding, the startup is positioned as one of the leading companies in the F&B outsourcing sector for hotels, aparthotels and tourist accommodation and demonstrates its ability to continue growing and expanding in the market.
Below, we share the interview conducted by Tech Food Magazine:
What is the current status of Le Room Service?
We are currently operating in four cities: Seville, Madrid, Barcelona and Lisbon. We are present in more than 300 hotels, almost 20,000 rooms, and around 10,000 orders per month. Turnover is over €200,000 per month, with a figure close to €2M by 2022. This represents a growth of 150% compared to the previous year. For this year we expect to continue with the growth trend and achieve a turnover that will soon exceed €250,000 per month.
What are your short-term objectives?
We want to balance growth and profitability. Taking into account the macroeconomic situation and the fact that we have already achieved a significant turnover, it is a priority to increase the company’s profitability. At the same time, we want to continue to expand both nationally and internationally through a controlled growth plan. Based on expanding our services in current destinations and with a presence in new cities.
You have just closed a €1.4m round, in the current context of slowing investment, how has it worked out for you?
The paradigm has changed somewhat due to the current situation, there are fewer investments and these take longer to close, and the type of company in which we invest has also changed. We have relied largely on the support of our partners, which has allowed us to raise €1.4m between capital and debt. This gives us enough runway and room for growth to reach profitability and to be able to plan for growth with much less risk, with organic growth or a possible larger round supported by international investors for rapid and ambitious growth, but with a very solid base to support it.
How do you plan to use this capital injection?
There are several ways of working, always keeping in mind the objective of achieving profitability… The development of new lines that our customers demand from us, efficiency in operations, margin improvement, expansion both nationally and internationally and also improvements in our corporate social responsibility policies, continuing with our commitment as a sustainable company. We also want to optimise our technology.
Currently each client has its own platform, we are developing an algorithm to optimise operations and we want to integrate the system with the hotels’ PMS to obtain more relevant information from the end user. Hoteliers greatly value having real-time information on where they are globally with respect to the sector.
A fund with companies from the food industry behind it, such as Tech Transfer Agrifood, what does it bring to your business model? How can it help you?
We value the entry of Tech Transfer Agrifood very positively. It is more than just a financial fund, whose contribution may be more economic or a one-off contact. It helps a lot to have first-hand contact with leading companies in the sector. As we are present in almost all the hotel chains, synergies are emerging with some of them, launching tests or pilots together.
In this time of running, as a company, what lessons have you learnt that are helping you to move forward?
We have learned a lot from our clients, we know what each one needs and how each of our services will work best. For example, in room service, the bigger the hotel and the more rooms it has, the better it works for us. The Grand Chain, 5-star and 4-star hotels work very well. Normally it is linked to the fact that this type of hotel is more corporate and business-oriented: it usually has spaces for events and gives better metrics in terms of number of orders. On the other hand, the average ticket can be even higher in boutique or small hotels, because they have a more familiar type of client, with a different type of consumption and more of a whim/occasion. We are talking about an average corporate ticket of between €27-32 and above €36 on average in family hotels.
As far as seasonality is concerned, as they are large urban destinations, we only notice it to some extent in Seville and Madrid, where turnover drops by 20% in summer, although this is not significant: demand recovers quickly once the low season is over. In general, this is linear in this type of destination.