Tabbedout raises $7.75 million for expansion [Austin American-Statesman]
(Austin American-Statesman (TX) Via Acquire Media NewsEdge) Oct. 10--Austin-based tech company Tabbedout, whose app lets restaurant and bar patrons pay their tabs using a mobile phone, has raised $7.75 million for expansion.
The company, which was founded in 2009, has experienced rapid growth of its mobile payment software. Its app is now used in more than 5,000 locations nationwide. That's up from about 1,000 locations a year ago.
Tabbedout's customers include TGI Friday's, Famous Dave's and the Greene Turtle restaurant chains.
Investors in the new round were NEA, Heartland Payment Systems and Morgan Creek Capital. Tabbedout has raised a total of about $17 million.
The Tabbedout app is available for free on iPhone and Android phones. Users store their encrypted credit card information on the app, which is linked to the computer systems used at each business.
Wait staff sends customers their bill to their phone, where they close it out, including a tip, and provide feedback. If they forget, the system closes it out for them.
When a customer opens a tab, the restaurant gets information including how many times the guest has been there and what was ordered previously. Based on that, the restaurant can send targeted offers to the customer.
If a customer provides negative feedback, it is sent to the restaurant's general manager, who can respond.
"We talk to thousands of merchants, and the No. 1 thing they hate is not having the chance to remediate something before the customer leaves and writes a bad Yelp review," said Alex Broeker, Tabbedout's CEO. "If you can respond immediately by taking an item off the bill or offering a coupon, it goes a long way in the customer not Yelping about it later."
The new funding will allow Tabbedout to increase its 31-person staff. The company, which has offices on West Sixth Street, plans to add 20 workers over the next year. It is hiring in sales, marketing and product development.
Tabbedout has grown its customer base by changing its sales model, Broeker said. The company initially pursued restaurant and bar customers individually; now it has partnered with five payment processing companies, which resell the software.
The National Restaurant Association and research analyst firm Double Diamond Group estimate that the market for hospitality mobile payments is 650,000 locations nationwide.
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