The creators of a mobile application offering discounts at UAE restaurants have raised US$730,000 (Dh2.6 million) in funding ahead of an expansion to other regional markets.
RoundMenu, which was launched in June by the co-founders of the Zawya website, offers discounts of up to 40 per cent on restaurant bills.
It is the second venture by Honeybee Tech Ventures (HBT), a technology incubation company based in Dubai and set up last year by Ihsan Jawad, Zaid Jawad and Husain Makiya.
"We raised $730,000 from a total of four investors," said Ihsan Jawad.
The funding came from Honeybee, the venture-capital firm Beco Capital and the food supplier Horeca Trade, he said, declining to name the fourth backer.
RoundMenu, which is available on Apple, Android and BlackBerry smartphones, currently features promotions for more than 200 restaurants.
The application identifies your location and alerts you about nearby promotions.
Zaid Jawad said the majority of the discounts were at restaurants in Dubai, with some in Abu Dhabi. "We are working to go into Saudi and Lebanon at the next stage," he said.
To get an offer, users must send an SMS to a special number, which costs Dh5 per message. This is RoundMenu's main source of revenue and it receives about Dh3 from each SMS - with the rest going to the telecommunications partner.
"We've tied up with the local telcos to provide this - Etisalat and du - so that we are able to take credit from the user's phone bill. That's the revenue generator. It's free for restaurants to list," said Zaid Jawad.
He added users could also buy credits in bulk, which meant the payment to the telecoms company would be bypassed.
The app has been downloaded 8,300 times and has helped to drive 5,000 guests to restaurants, although Zaid Jawad declined to specify the number of discount vouchers distributed through the service.
The RoundMenu app operates according to a different business model to daily-deals websites, which have been subject to fierce competition and some controversy in the Middle East.
More than 20 daily-deals sites have launched in the UAE, including the global market leader Groupon. The United States firm LivingSocial, which entered the Middle East through the acquisition of GoNabit last year, last week decided to pull out of the region amid heavy losses.
Mr Makiya said RoundMenu's business plan was more sustainable than the daily-deals model, which typically offers higher discounts.
"If you're going to get something at a 60 per cent discount, you're just going for the deal," he said.
"RoundMenu builds more loyalty with the merchant than the daily-deals sites … It's much more sustainable and realistic. And with the discounts they are giving [the restaurants], can actually afford it."
HBT's first venture was the jobs portal Laimoon, which launched last October. Laimoon claims to have 2,600 jobs listed and to have about 49,000 registered users.
Mr Ihsan, and Mr Zaid Jawad and Mr Makiya were co-founders of the Zawya business portal, which this year was acquired by Thomson Reuters for about $40m.
Ihsan Jawad said the team was now turning its attention to consumer-focused online projects, and said HBT had a third project in the pipeline centred around e-commerce. "We did Zaywa and it worked. And we said, 'OK, let's have a go at the consumer side,'" he said.
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