More than 15 years after its founding, online-ordering company Olo ticked off a major milestone on Wednesday when it began trading shares on the public market.
It is just the latest in a line of milestones for the company and its founder and CEO, Noah Glass. On Wednesday afternoon, with some prodding from a Restaurant Business reporter, he spent a few minutes reflecting on some of the other key events that led to him ringing the opening bell at the New York Stock Exchange, a moment Glass thought “would happen either not at all or much faster than it did.”
The first sign that it might be a possibility came in 2009, when Olo built an integrated ordering and payment system for Five Guys. The final product was something Glass realized could be replicated at other restaurant chains. (The company now works with about 400 of them.)
Next came the emergence of ride-hailing service Uber, which introduced consumers to a new idea: That smartphones “are remote controls for buying things in the world around you,” Glass said.
And then came Panera 2.0 and Starbucks’ mobile order and pay platform, which further demonstrated that your phone could be used to buy things from restaurants.
None of these developments were a surprise to Glass, who had recognized the power of the cellphone as early as 2004, when he and a team of engineers built a rudimentary text-message ordering system. The next year, he withdrew his admission to Harvard Business School to start what would become Olo, with the help of $500,000 in venture capital funding.
Fast-forward to 2020, and the New York-based company had grown to more than 400 employees and thousands of restaurant locations, and was planning an initial public offering. Then the coronavirus hit, an event that would prove to be another milestone for Olo.
Not knowing what the virus and ensuing restrictions would mean for restaurants, the company “hit the pause button” on the IPO, Glass said, and rewrote its strategy to focus on rolling out new services for pandemic-era dining. Those included things like enhanced curbside pickup, socially distanced delivery and helping restaurants add alcohol to the to-go menu.
“This has been a year of great exploration and innovation in the sense that necessity is the mother of invention,” Glass said. “COVID pulled us into the future.”
Like other companies with a hand in on-demand ordering, Olo reaped some benefits from the pandemic. Revenues were up 94% in 2020, and it processed $14.6 billion in gross merchandise value, up from $5 billion in 2019. It also turned a profit of $3.1 million after years of losses.
The company chose to proceed with its IPO plans, Glass said, to make a statement to its customers that it would be around for the long-term.
“You can build your digital foundation on top of Olo,” was the intended message, one Glass said was important during a time of great instability for restaurants.
Fortunately for the industry, things are beginning to stabilize. More people are getting vaccinated, restrictions are easing and customers are returning to dining rooms en masse.
But Glass remains as confident as ever that the future of restaurants will be digital-centric. While the industry wonders how much of the pandemic-driven off-premise boom will stick around, he cautioned not to confuse digital business with delivery and takeout.
“Digital has penetrated the on-premise experience for the first time due to COVID,” he said, citing the rise of QR code-based ordering as one example. Olo is investing in that technology, as well as other dine-in-focused features such as tabletop kiosks and waitlist software intended to help restaurants drive orders, which equals revenue for Olo.
Where it had previously been focused on servicing the off-premise experience, “We now think of our opportunity as every transaction in our customers’ business,” Glass said.
And while some restaurants might be hesitant to let a screen get between them and their guest, consumers armed with their remote controls for the world are ready for this tech-enabled dining experience, he said.
“Digital is going to touch every transaction in this industry over the long-term.”