A young software app firm has won a Cuyahoga County economic development loan that will help it grow as it pursues a patent that is the foundation of its software that helps restaurateurs, caterers and their potential customers make the right connections. Called Wheedle, the app vies for the attention of consumers and businesses on either side of transactions involving hospitality searching (such as Yelp), restaurant reservations (think Open Table), Eventbrite (event ticketing) and Groupon (discount promotions). A consumer planning a night on the town or a future event logs onto Wheedle to find the right place for the occasion. The consumer enters the city and then picks a preferred part of town, a date and time, the number of people involved, how much the consumer and guests plan to spend. Then the consumer picks from a roster of events that now offers the choice of getting drinks, having a meal or needing a private room, catering, VIP bottle service or entertainment. The app would, for example, allow the father of a groom-to-be to seek bids from restaurants or catering firms for a place that could cater for vegetarians in a specific part of town for a wedding rehearsal dinner at a certain price point. The software will store a member’s currently booked events and past history on the site.“The IP (intellectual property) is around both creating the individual request for proposal for such events, but also in allowing the merchant to respond with a custom offer,” said Brian Stein, president of Hospitality Engagement Corp., which has developed Wheedle.“The specific language of the (patent) filing is a system that broadcasts an event request for proposal to which a merchant (using a) mobile device can selectively respond to and can be customized for the event request for proposal,” Stein said. The company earns a per person transaction fee from merchants when a consumer accepts an offer from an establishment using Wheedle.
The company has 250 active users in the region and has filled 2,400 requests since going live last year.
“Our plan is to continue scaling up in Cleveland and be selling in Chicago this winter,” Stein said. “At the end of 2017 we hope to be up to scale in Cleveland and Chicago and open two new markets, in New York and San Francisco.”
There are services that consumers can use in those cities for parts of the Wheedle package, Stein said, “but nothing as comprehensive. Those that do compete only go after dinner, or theater tickets or bottle service.”
The company has only two employees, Stein and his partner, CEO J.P. Weston, whose background is in the hospitality industry. But Stein said the company anticipates creating two jobs soon. Its proposal to Cuyahoga County projects the company will create 84 jobs, with a payroll of $2.5 million, over five years.
Flashstarts Inc., a business startup accelerator and venture fund, has taken the young business under its wing. Flashstarts, housed in Terminal Tower in downtown Cleveland, offers young software companies an investment of $25,000 in office space and a variety of mentoring and other services.
“We think they’ve nailed a real opportunity,” said Charles Stack, a co-founder and CEO of Flashstarts. “The first time I looked at the thing, I said, ‘Oh well, somebody else must be doing this.’ Well, not true, we found after doing the due diligence on the concept.”
Stack said Wheedle allows venue operators to interact with their customers and react to their customers’ needs, unlike Open Table.
The young company is also getting advice from Jumpstart Inc., the Cleveland nonprofit entrepreneurial consulting and investment organization.
“Wheedle’s management team are true subject matter experts and their service is very unique in that it’s valuable to both the consumers who are going out for dinner, drinks and events, as well as the businesses who are trying to engage with those consumers,” said Jon Grimm, a venture partner at JumpStart.
According to the county’s loan proposal, the pair raised at least $385,000 before seeking the county loan, which runs for four years and has a fixed rate of 5%. The company will make quarterly interest-only payments until the loan comes due or until Hospitality Engagement raises an additional $1.5 million.
The loan is from the county’s North Coast Opportunities Technology Fund, which invests in high-growth technology companies in Cuyahoga County. The North Coast fund provides low-interest loans of up to $125,000 to help companies create new jobs, attract additional capital or complete specific projects.
Hospitality Engagement meets all three of those criteria, the last because it is working to get its patent.
Since its creation in 2008, the North Coast fund has made $3.6 million in loans to 38 companies. According to the county’s development department, these companies have raised nearly $50 million in additional funding, generating more than $18 million in revenue and creating or retaining more than 140 jobs. It’s part of the county’s Western Reserve Fund, the $100 million financial backing for the county’s five-year economic development plan.
Source: Crain's: SunDown RunDown Canton alum "Wheedle" gets boost from Cuyahoga loan fund URL: http://www.crainscleveland.com/article/20160917/NEWS/160919857/party-planner-app-wheedle-gets-boost-from-cuyahoga-county