Dining Desire: Desiring What the Actress Likely Orders at Her Favorite Restaurant
💥 Hey Folks,
Got the weekend vibes going strong here! Here's your last dose of news before we cruise into 2024. After a wild year, it's finally the grand finale of this year's our newsletter!
Remember, the legendary Mark Twain - "I didn't have time to write a short letter, so I wrote a long one instead." - that pretty much sums up my approach to this final Top of the Fold section of 2023. It was hard to condense all the thoughts that swarmed my brain, but I did my best to bite the bullet. 💪
As 2023 slowly closes its book, I thought I'd take this chance to drop a few rebellious opinions and, yes, I dare call them predictions for the wacky — I mean, wild — year ahead. Why not, right? Hindsight always provides a clear vision, and when we look back at history, we'll see it all as obvious as day.
Anyway, here are some things to keep on your radar in 2024:
- 🔄 Consolidation: The foodservice and hospitality tech & innovation industry is going to see a significant spike in M&A activity, just like the Kinks' predictions for the people in the world of FoodTech and ResTech - give people what they want! Operators are fed up with the overwhelming number of ISVs (the tech jargon for software vendors) they need to deal with. They're longing for a one-stop shop, and while that might be impossible, a reduction in the number of companies they work with is a real possibility. Keep an eye on Branded as we bet on this.
- 🏆 Best in Suite: The M&A activity I expect to see will revolve around companies trying to create the best overall suite for operators. This means reducing the need for operators to engage with several technology providers and providing a more streamlined experience. Instead of hunting for 'best in class' in every little corner, operators want to work with providers that offer strong, complementary solutions.
- 🧬 Specialization and Strategic Investors: Times are evolving, and it's becoming increasingly clear that specialized and strategic investors will rule the day in 2024. Emerging companies, particularly in fragmented industries, need more than just money from their investors. They require industry insights and strategic partnerships. This is particularly true in industries like hospitality, where Branded is already seeing large companies looking to venture further into tech and restaurant groups wanting to own their tech stack. Specialists can bring valuable knowledge and network effects to the table.
- 📈 Simplification of Rounds: The frothiness in the capital markets is slowly subsiding, leading to a return to more traditional financing rounds and a simplification of various gap-funding methods. Companies will need to size their rounds properly and deliver on their roadmaps. The path to profitability will take on greater focus as investors become less generous and forgiving towards companies that execute poorly.
- 💰 Dry Powder: Fear not, the record amount of investment money waiting on the sidelines isn't going anywhere. Yes, it's there, but it's not a guarantee that it'll surge to venture spaces. Investors will need to be convinced that companies seeking capital have a solid roadmap to profitability. Burn is as nasty as it gets, and the current market's painful reminder of its existence keeps investors cautious.
One more thing — the vibrant Branded community is expanding, and if you're interested in learning more about us, consider joining our Access Hospitality Network. We're excited for what lies ahead in 2024, and with our newest tech and innovation fund and our first restaurant fund, we're ready to shake things up. Let's make this new year a game-changer!
On that note, I just want to say thank you to each and every one of you for your support this year. It's been a challenging 12 months, but we powered through, and it wouldn't have been possible without you. Wishing you all a prosperous and exciting 2024!
Your pal,
Jimmy Frisch
P.S. Don't forget to join us for a special edition of Hospitality Hangout! We've got a fantastic show lined up with R.J. Melman from the legendary Lettuce Entertain You restaurant group. You can catch the episode on Spotify, Apple, Amazon, iHeart, or your favorite listening platform.
P.P.S. And the winner of our WITW is Branded contest goes to our summer intern and a close friend of Branded, Paloma Fernandez! Safe travels, Paloma! We'll see you in 2024.
🔍 Wondering about something? Ask us! 🌟Drop us your questions, and we'll answer for the world to see! Or if you're shy, go ahead and ask anonymously. Either way, you'll be featured in our Ask the Headline segment next week. 📩 [email protected] or [email protected]
- In the dynamic hospitality industry, technological advancements, such as streamlining food service operations, will continue to be a key focus for portfolio companies in 2024.
- The finance sector is expected to witness an increased interest in lifestyle businesses, as strategic investors seek to bring value through industry insights and strategic partnerships.
- Podcasts, like Hospitality Hangout, are becoming popular platforms for engaging with industry leaders, such as R.J. Melman from Lettuce Entertain You restaurant group, offering valuable insights into the hospitality and sports industries.
- Technology innovations, particularly in the food service and hospitality sectors, will likely see an increase in mergers and acquisitions (M&A) activity, as companies consolidate to offer more comprehensive solutions for operators.
- The sports industry, like other sectors, is slowly returning to more traditional financing rounds, with a greater emphasis on delivering on roadmaps and achieving profitability, as investors become less tolerant of poor execution.
