Forex Trading

Olo Stock: Pioneering On-Demand Commerce For Restaurants NYSE:OLO

Olo is a first mover and leader in the restaurants on-demand commerce space. The company’s growth is normalizing after a boost due to COVID-19, but I believe Olo is well positioned to grow longer term regardless of COVID or no COVID. The quarters ahead might be a little bumpy due to YoY comparison, but that’s no reason to forgo an investment for the long term (at least 3-5 years, ideally more).

  1. Nonetheless, Olo is not even in the first innings with $98 million in revenue for full year 2020 and guidance for ~$145M for fiscal year 2021.
  2. For every 100 parties seated, Host users save 30 minutes of manual work on average.
  3. Wingstop, whose key food ordering and delivery providers are DoorDash and Olo, posted more than $1 billion in digital sales in 2020, a company record.

What gives me extra confidence in Olo is that it’s being run by its founder, Noah Glass. He has deep roots in the restaurant industry from serving as a cashier, server, bartender, and delivery driver before founding Olo. Founders who know the pain of a specific industry and innovate to come up with a solution are usually relentless and achieve much more than a non-founder might. Just look at Jeff Lawson of Twilio (TWLO) as an example of a developer who founded Twilio to empower developers.

In totality, Olo’s platform integrates with more than 100 restaurant technology solutions such as POS systems, delivery aggregators, payment processors, and loyalty programs. Think of Olo as having the universal key that unlocks dozens of doors, or tech solutions, used by restaurants. At this stage, I’m happy to see Olo investing in itself, especially as it aims to improve its current products and introduce new ones to acquire new customers. To that end, Olo serves more than 400 brands and ended 2Q21 with 74,000 total active locations, representing growth of 30% YoY. ARPU also grew 14% YoY but declined sequentially, largely due to single module deployments as they generate less ARPU. Olo believes their TAM is $7 billion based on current product offerings and focus on enterprise restaurants within the U.S.

Olo’s technology has since adapted to meet the demands of today’s convenience-seeking consumer. Glass’ mobile ordering technology pre-dates the iPhone as early technology made text messaging orders between consumers and restaurants possible. Scale and protect your digital business with our comprehensive payment platform, proven to drive sales, reduce fraud, and simplify payment processes. Offer Borderless checkout, mobile wallets, and card-on-file support for added convenience.

What Investors Need to Know About Olo

The leading online ordering and delivery solution for top restaurant chains like Wingstop makes its stock market launch today. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, economic books reviews happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on, top-rated podcasts, and non-profit The Motley Fool Foundation.

Learn why (and how) leading brands are focusing on building a restaurant tech stack that digitizes every transaction, captures more data, and grows guest lifetime value. Enable direct delivery at scale with all the right controls to streamline operations and enhance the guest experience. Expand your reach with direct and marketplace delivery via our integrated network covering 99.9% of the U.S.

Enable Hospitality with Modern Restaurant Technology

Have you ever wondered who is behind the easy ordering and coordination of delivery from some of your favorite restaurants like the Cheesecake Factory (CAKE), Shake Shack (SHAK), and Wingstop (WING)? Its Ordering module provides chains a white label direct-to-consumer ordering channel. So when a customer orders pickup from Wingstop’s app or website, Olo is powering that service.

Olo’s success will likely invite competition from bigger players like Square (SQ), PayPal (PYPL), and Lightspeed (LSPD). Their current products don’t overlap with Olo, but it’s possible they could release products that will. However, Olo was founded in 2005 and is a first mover in this space. Their platform covers multiple solutions and won’t be easy to replicate. Increase direct sales with our secure, fast, and reliable ordering platform, built to integrate with your systems and meet guests where they are. On average, brands see a 190% increase in same-store sales year over year.

Thoughtfully greet and serve dine-in and takeout guests with our all-in-one waitlist, reservation, order, and table management tool. For every 100 parties seated, Host users save 30 minutes of manual work on average. Ordering was the first module introduced by Olo, but with the implementation of Dispatch and Rails, the revenue mix has trended toward transaction based revenue. As of December 31, 2019, 44% of Olo’s customers used all three of its modules. New York-based Olo, short for “online ordering,” was founded by Noah Glass in 2005, about one year after Grubhub was founded and several years before DoorDash and Postmates were household names. A new food tech disruptor is making its Wall Street debut Wednesday.

Who is Olo?

But unlike other recent splashy IPOs like DoorDash, digital ordering platform Olo is flying under the radar. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… That’s right — they think these 10 stocks are even better buys. Despite a limited number of reviews, Noah Glass is a highly rated CEO (97%) and Olo is loved by its employees on Glassdoor.

Trusted by 700+ top restaurant brands

It’s always good to take TAM with a grain of salt but it’s hard to deny the opportunity ahead is enormous and Olo is just getting started. Dispatch enables restaurants to accommodate delivery orders through their own website or app. This is less costly than being listed on a delivery marketplace because commission fees for restaurants are less per order. Unlike third-party delivery providers, Olo’s prime mission is to drive digital orders through a restaurant’s own branded channels. The company’s strategy is to work with large, well-capitalized national chains – the “fastest-growing restaurant brands in the industry,” according to Olo’s S-1 filing.