Interview with Micaela Illy, co-founder of EatsReady, the first digital alternative solution to traditional meal vouchers

Q: EatsReady is the first digital alternative solution to traditional meal vouchers. How did the idea of EatsReady come about? Can you explain its business model?

Micaela: I started working in business consulting at BCG, but was always greatly motivated and inspired by entrepreneurship.  During that time, I met a dear friend Olivia Burgio. We started working together on a retail project in the foodservice space – in 2018, Olivia and I decided to leave BCG to launch our business.

A fortuitous mix of coincidences led us to meet the guys of EatsReady, a start-up that brought the B2C click & collect model to Italy. Enticed by its potential and tech nature we decided to join EatsReady, originally as CMO and CFO, and thereafter leading it as co-CEOs (a decision that many surely do not share, but worked incredibly well for us!).

At the time EatsReady – as many B2C start-ups – had very high customer acquisition costs, low retention, and low defensibility. Our neighbours from the delivery space where also a big threat as they could very easily add the pick-up option in their platform.

From our original idea fast casual food retail, to the first months in EatsReady, we got very passionate about a big problem faced by all food retailers – meal vouchers. By cashing in meal vouchers, merchants are burdened by very high commissions, long payment times (on average 60 days), multiple POS and payment solutions at the cash desk, etc.

We studied how the market was structured. We identified 3 key points: i) it’s huge, because we are talking about more than € 3 billion in transactions per year; ii) it’s essentially a monopoly, because one big player, since the bankruptcy of Qui! Group, now controls circa 60-70% of market share; iii) and above all it had a very large opportunity for innovation at a technological level.

EatsReady had a nimble infrastructure, the team knew the restaurant business very well, and we had an app for users and one for restaurants – we thus decided to pivot our platform to tackle the meal voucher market.

This is a market with a lot of barriers to entry, both in terms of legislation – e.g., you need to have a share capital of € 750,000 for your company, as well as certified financial statements – and in terms of business model, because of the network effects in growing the business, you need thousand and thousands of food merchants on your platform to be competitive (e.g. the largest player in the market has more than 150.000).

Therefore, we first identified a niche in meal vouchers where we could enter for a first test phase without needing an extensive network of merchants, which is the “widespread canteen” [a credit that can be spent daily during the lunch break, in partner restaurants, not cumulative], which remains our most interesting business line to date.

We therefore launched the pilot and, in the meantime, we made the first capital increase to bring our share capital to € 750,000. Various investors joined the company, including Gellify, really savvy investors who have the right approach to doing start-ups in Italy; they are very collaborative and have helped us a lot over time.

We then launched the meal vouchers, today we are the first digital meal voucher in Italy. We have optimised all the processes for both the companies and their employees, and for the merchants.

Our real point of differentiation is the business model, we are an ‘ethical’ meal voucher.

Before us, meal voucher companies differed on the basis of the discounts they offer to companies. A meal voucher of € 10 is sold to companies at a discount of up to 20%. The amount discounted is paid by the merchants when they cash in the meal voucher. Moreover, there is the whole administrative part to be considered, and the fact that even today 30% to 40% of the volumes are paper meal vouchers (imagine retailers literally heading to meal voucher HQs to cash in boxes of paper vouchers!).

EatsReady wanted to totally switch the paradigm. We offer companies an innovative service for their employees. The credit we sell is not discounted. This allows us to drastically lower the merchant commissions.

We also offer merchants a value-added service. For example, on the app they can enter the menu, activate the pre-order function, handle all payment in one click, etc.

EatsReady has the social mission of helping merchants in a market that to date has left them as the weakest party. We have to respect all players in the ecosystem, we want to create value for all our main stakeholders.

Q: What results have you achieved till now with EatsReady? How much did Covid-19 impact on your business? And what are the plans for the future?

Micaela: We launched the service in 2019, and the first year we did 34 times our 2018 revenues. Then Covid-19 broke out. Our only source of revenues was restaurants.

Yet, we managed to hold our grounds thanks to a new the partnership with Deliveroo – today we are the only meal voucher in Italy that you can spend on Deliveroo. And then, in October 2020, we started working with Esselunga, our first large scale retailer.

It’s been a tough year for us, because we had a loss of turnover in the short term and a loss of our growth metrics. But we know that as soon as the Covid-19 is over, people will start eating out more often and volumes will come back.

It was much more difficult for our merchants. We have tried to support them with various initiatives, promotions, gift vouchers, etc., but for some merchants unfortunately it has been of little use.

So, Covid-19 confirmed how right our mission to help merchants is, especially in a country like Italy, where food is one of our beauties, and we must preserve that value.

Today we have robust corporate clients, we have more than 600 food merchants on our platform, we have a disruptive technology that we keep on improving, and we’ve highly improved our cost / turnover ratio (also thanks to Covid-19). We are now focusing on the commercial side to grow the business in our key cities – Milan, Turin, and Rome.

Our mission is to spread the EatsReady business model as much as possible, and the best way to do that is with an industrial partner, who has great synergies either on the merchants’ side or companies’ side.

Q: You grew up in a family of entrepreneurs well known on the international scene. How much has your family story encouraged in your decision to start a company?

Micaela: I’ve been very lucky to have the chance to grow up in a family of entrepreneurs. I’ve always had great admiration for the passion and dedication that I’ve seen my family members invest in their products, their team, their corporate culture – I guess I always dreamed of managing to do the same. I can’t imagine myself doing any other job. For me, doing business is creating social value.

I’m grateful for my experience at EatsReady, because I realised that there’s an ocean between wanting to be an entrepreneur and actually doing it. The pressure on you, the way you deal with problems, the way you manage so many variables, so much complexity, so much risk, and so much accountability, you can only learn by doing it.

For me EatsReady is an invaluable experience, with all its difficulties. Like all start-ups in Italy, which have issues regarding shareholding structures, capital, etc., every difficulty experienced with EatsReady for me today is an added value, which one day I hope to bring to my family company.

Believing in a mission and being able to carry it out was a great experience, even during the pandemic.

Q: You are a fintech company that works with restaurants and retailers. What do you think of the Italian foodtech market?

Micaela: I happily met a lot of incredibly motivated and tenacious entrepreneurs in the foodtech sector, in the various value chains and business areas, e.g., food deliveries, ghost kitchens, restaurant management systems, apps in the wine space. They are doing very well, even abroad.

There is already an enormous heritage in the Italian food industry. I sometimes wonder how innovation stemming from start-ups in the food tech space can help preserve and create more value from what already exists in the Italian F&B ecosystems.

It must also be said that it is difficult to work with Italian companies, because Italians are usually very stubborn. There are many corporates in the food industry that are approaching start-ups and open innovation, but some more traditional companies still need to understand how to get value and mutual benefits from working side by side start-ups, considering that start-ups need to grow, and the companies need to innovate.

To scale start-ups, it would be great if Italian corporates would help. Unfortunately, many corporates still don’t understand how to work with start-ups. They don’t understand that a start-up is a team of people who have the right attitude to innovate. And they still struggle to understand how to integrate start-ups into their ecosystem.

Q: What advice would you give to a future female start-upper?

Micaela: First of all, to go all-in, for sure. As women, we question ourselves too much, and we are our first and most severe critics. But at some point, you have to take the leap and go all-in (of course, hedging your risks!).

The other advice, which is a trade-off, is resilience. One of the things that EatsReady has taught me is that you don’t give up, it’s never over and at some point, things turn around. On the other hand, you have to be careful not to escalate the commitment, not to fall in love with your idea and your path, because sometimes it’s better to change it.

Another thing – that is little said – is that it is normal to have low self-confidence from time to time. We are all the same, we all have fears, but in the end the desire to do business is stronger than the fear and regret of what you don’t do. The fear of standing still is worse.

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For more info on EatsReady, visit: https://eatsready.com/en