OpenTable Inc., online restaurant reservation service, has close to 10,000 restaurants in its network and reserves seats for close to 3 million clients every month
Kathy Smith, a principal with Renaissance Capital, a Connecticut research firm, said, “The IPO market is starting to open up. The market is open for business but only for strong companies willing to offer attractive prices."
OpenTable’s IPO, announced at the end of January, is the seventh Wall Street IPO this year. The company has been able to raise $31.4 million in the offering by selling 1.57 million shares. On its debut on the Wall Street, OpenTable opened at $20 per share.
OpenTable and its revenue model
Founded in 199 by Chuck Templeton in San Francisco, OpenTable is an online, real-time restaurant reservation service. The revenue model of the company is as thus: End users do not pay any fee or charge for availing the service. The company charges fee from the restaurants on a monthly and per-reservation basis.
Set up during the dot-com heyday, OpenTable boasts 10,000 clients as on date. It is one of the few set ups that have been able to keep an upward-trend on the revenues despite the overall economic slump. Not only did OpenTable survive the dot-com crash, it was able to keep its head above the water while competitors like Foodline.com and Ireserve.com shut shop.
This is not to say that OpenTable has been totally immune and unaffected by the present day recession. The company mentioned in its IPO filing the risks that the current economic slump poses to its business. It read, “General economic conditions and the current global financial crisis may adversely affect our business, operating results and financial condition.”
The online reservation company admitted, “We believe that the total number of reservations, including reservations by phone, seated by our restaurant customers has decreased approximately 10% to 15% for the fourth quarter of 2008 from the same period in 2007.”
The service provider has close to 10,000 restaurants in its network and reserves seats for close to 3 million clients per month. The company plans to make it bigger by replicating its U.S. model in other countries like Germany, Japan and the U.K.
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