Food Photos Are Big Business: OpenTable Snaps Up Foodspotting for $10M

Foodspotting was one of the earliest success stories to launch out of a Startup Weekend event, an idea that was pitched at one of the weekend-long hackathons in 2009 and going on to raise almost $4 million in funding. The company aims to help people share and discover both restaurants and dishes across the U.S., and today announced that it has been acquired by OpenTable for $10 million in cash.

“We’re so excited about this opportunity because not only will the product and community we built live on, we’ll get to continue to focus on what we love most: food,” said co-founder and CEO Alexa Andrzejewski said in a statement to BetaKit.

It’s not hard to imagine how Foodspotting will be integrated into OpenTable’s restaurant reservation platform, especially since the two companies recently partnered to let diners see images of restaurant dishes when they booked tables (in addition to Foodspotting users being able to make reservations on OpenTable via the app). In terms of the team, Andrzejewski will be joining OpenTable as lead user interface designer, though there’s no word on what position co-founder Ted Grubb will take (co-founder Soraya Dorabi, who was largely in charge of marketing, left the company in August 2011).

The app launched to help people take photos of what they’re eating, share with friends, and discover new places to eat and dishes based on other users’ photos. While now Instagram is known for users sharing photos of their food, at the time Foodspotting was the go-to way to share your dish if you were out at a restaurant. And it grew quickly – the app hit one million downloads in August 2011, and as of July 2012, after debuting a redesigned version in February 2012, the company had over three million downloads.

Despite its traction, other services started to provide stiff competition for Foodspotting, both in terms of user numbers and functionality. Foursquare and Instagram increasingly became popular tools for sharing food-related photos, and as Instagram gained millions of users, and ultimately was acquired by Facebook, Foodspotting decided to play nice in the sandbox rather than try to get people using both standalone apps, and launched Instagram integration.

Another issue facing the company was monetization. In July 2012 Andrzejewski told BetaBeat that the company primarily made money through sponsored contests, though they were looking into making money by driving diners to local restaurants. It’s not clear whether  they’ll be looking to monetize the service now that it’s a part of OpenTable.

Though they haven’t outlined any specific plans for what’s next, the team wrote in their blog post today that they will be working on bringing “smarter recommendations, better restaurant information and a more visual, social and design-driven dining experience” to OpenTable.

“OpenTable has established a strong network of diners and restaurants while we’ve built a team with expertise in discovery, smart social recommendations and visual design,” Andrzejewski said. “Combined, I believe we can do great things.”

Whether users will continue to flock to Instagram to post their food photos or whether Foodspotting can continue to build up a siloed community of users remains to be seen, but either way it’s a successful exit for a company that started with the basic premise of snapping photos of things you eat. And with competitors like Urbanspoon vying for diners’ attention, this acquisition should help OpenTable capture more of a mobile audience, while also beefing up their own listings.

Erin Bury

Erin Bury

Erin has covered startups and technology for over three years in publications including Sprouter Weekly, The Globe and Mail, Business Insider, Mashable, and VentureBeat. She also writes a regular startup column for the Financial Post, and is a technology expert on CTV News Channel. Before BetaKit Erin worked as Director of Content & Communications at Sprouter from its launch in 2009 until its acquisition by Postmedia Network Inc. She was recently named one of Marketing Magazine's 30 Under 30 in 2012.

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