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Cape Town eating-out app Feastfox today announced that it had successfully closed an angel fundraising round, raising $175,000 (R2.3 million) primarily from Silicon Valley-based angels and venture-capital (VC) firms.
A mobile startup out of Stanford University — with a presence in Silicon Valley, Cape Town and Budapest — Feastfox claims to allow diners to “book now, eat now”.
The funding is from angels and VCs including Co-Creation Capital, Dorm Room Fund and top angel investors such as Larry Kubal, founder and managing partner of Labrador Ventures, a seed stage-focused Silicon Valley venture fund with more than $200-million under management.
Feastfox co-founder, Cape Town local, Stuart Murless (pictured above) said the funding is in exchange for Simple Agreement for a Future Equity (SAFE) agreement, which gives investors the right to convert into equity the value of their injection whenever the startup does its first equity deal.
Murless said the investment would go into a holding company registered in Delaware, US to ensure that the intellectual property (IP) — which has been developed in Cape Town, the US and Budapest — is held offshore (*see below Editor’s note).
Feastfox co-founder, Cape Town local, Stuart Murless said the funding is in exchange for a Simple Agreement for Future Equity agreement
Murless said the investment will be used to acquire customers and cover marketing and public relations costs. The idea is to trial the app in Cape Town before the company looks to expand elsewhere — likely to the US.
He said Feastfox launched the app in late June after testing it late last year following a year of development.
So far the startup has signed up roughly 70 restaurants, most of them in and around Cape Town’s city centre, have signed up. Murless said there has been between 1000 and 2000 downloads of the app in the six weeks it has been available.
The startup generates revenue through having subscribed restaurants pay only when a patron that booked on the app turns up to their respective eatery. “We’re taking a lot of the risk, but it’s a nice way to bring restaurants onboard,” admitted Murless.
The startup’s other founders are Italian Mattia Ferrini, Hungarian Endre Vargas and Murless’s brother-in-law Daniel Petz, who is based at Stanford University.
The idea for the app, explains Murless, was originally developed by his brother-in-law Daniel Petz from Stanford University and Italian Mattia Ferrini who has a data science background. Hungarian Endre Vargas was then brought on board before Murless, who has a corporate finance background and has run a number of Vida e Caffes before, and Petz got talking about the idea.
Murless said clinching the investment had alot to do with Petz’s Stanford network. “The Stanford name is a very strong name in the US. It’s almost like a code that for an ex-Stanford person you need to make the time to meet with (another Stanford member),” he said.
Crucial too in getting the funding, he noted, was that the four co-founders were able to assemble a strong advisory board made up of among others — a former Tripadvisor staffer and a dynamic pricing professor.
Featured image: Feastfox co-founder Stuart Murless (Supplied)
*Editor’s note: Murless on 25 August 2017 subsequently told Ventureburn in an email however that the IP wasn’t created in South Africa as the two technical partners who built the app are based in Europe. He added that the reason for having a Delaware holding company was to facilitate investment by US investors.