Revel brought in adult supervision and the business is on the rise.
In 2017 we reported on Revel’s meltdown, where a fire sale buyer – private equity fund Welsh, Carson, Anderson & Stowe (WCAS) – acquired the company in an effective down round and Revel’s founders were politely shown the door. Since then there’s been a revolving door as WCAS worked to bring the right people on the bus. And by all accounts they have.
Revel is publicly relaunching itself with a clear and renewed focus. While venture capitalists ran the helm of “old” Revel, convincing the inexperienced founders that they could apply cloud POS to any vertical in any geography without much friction, “new” Revel is very much the opposite.
“We’re coming out and want to make it apparent who we’re going to be and what we’re trying to do,” shares Chris Lybeer, Revel’s Chief Strategy Officer. Chris, a former executive at Radiant/NCR, is but one of Revel’s senior additions that brings immense experience from the world of POS and brick-and-mortar.
“We want to emphasize that we’re focused on delivering to restaurants and specialty retail,” Chris shared. While Revel previously sold to stadiums, tire shops, grocery stores and more across six continents, Chris and his team recognized this as unsustainable. “We had too much to support and we couldn’t invest the appropriate amounts in R&D to advance Revel’s products.”
In 2019 Revel will have a strong focus on the US market though they will continue to grow organically in the markets they’re already in. “We will continue to service and support our existing customers in 94 countries but we’re going to focus our sales efforts in the US this year, and expand sales efforts in future years.” Honestly a company of Revel’s size had no business chasing deals in 94 countries and it’s clear why the founders were shown the door.
If you’re like us you are curious about the types and sizes of merchants Revel is focused on going forward.
We’re really attacking quick service (QSR) and fast casual. Our solution works well for table service (TSR) and speciality retail but we’re seeing strong market signals from QSR and fast casual which is growing at more than 15% a year. We think we’re finding the adoption we are because TSR as an industry segment is flat while retail is generally being Amazon’d to death.
Within these verticals, Revel now will have a solution for SMB (1-20 site chains) – called Revel Essentials – and a solution called Revel Enterprise for 20+ site chains. In the SMB space, Revel’s focus is on ambitious operators of larger single sites or growing chains. “For customers less than $250K of annual revenue, we are happy to forward them to Square as we are not the best fit.”
Revel has built out an internal enterprise sales force, along with a professional services capability to focus on larger customers. Their solution has different pricing and go-to-market tactics than SMB, and also based on whether they are specialty retailers or restaurants. We know it sounds obvious, but Revel wasn’t doing this previously. “We have 75 customers with over 20 sites, dozens over 100 locations and one over 1,000 locations. A lot of these customers we grabbed when they were 5 or 10 locations and over the past five years they’ve grown incredibly fast.”
Suffice it to say Revel has built system functionality to support businesses of true enterprise scale. In our estimate only Brink, and possibly Xenial, has crossed the chasm to 250+ location groups carrying cloud POS.
Unlike many of its legacy counterparts, Revel will have an open ecosystem for API integrations. “We’re updating our API so it can be better managed but we’re not going to turn away or curtail integration partners,” Chris explained. “We will have a short list of strategic partners that we recommend, and these relationships will come with revenue share agreements, but we won’t otherwise block out competitors.” This is a sea change from Chris’ previous employer, NCR.
While Revel won’t charge tolls they are toying with the notion of charging some small fee to sustain API development and developer support. “Our goal is to cover API costs but we’re not sure what that looks like yet,” Chris admitted.
Another change is the addition of a professional services group. Larger customers expect more handholding and attention and Revel is happy to give it to them.
When we were young we were like other cloud POS companies and looked at merchants through a transactional lens. Now we’re focused on being the cloud POS company run by adults that has real staying power. Our view is that when merchants select Revel, they are investing in an appreciating asset, and a partner. We want to build relationships with our customers and will be conducting health checks to ensure our customers are as successful as they can be. We feel this is sadly still a large differentiator from many of the aggressive cloud POS competitors.
At this point we had to ask what their roadmap looked like. Where’s Revel’s R&D going? For that we were given access to Erick Kobres, Revel’s CTO. Like Chris, Erick spent considerable time at Vivonet and NCR, two POS companies.
Consumers are forcing restaurants and retailers to change; they need to become part of a larger omnichannel world. If they don’t change they’re going to be in trouble. Your POS should be your partner in helping you get there, and that’s where we see Revel fitting in.
Erick shared that Revel needs to be great at connectivity. “Maybe the market settles down, or maybe it doesn’t – the rate of innovation is happening so fast. But retailers and restaurants need to meet consumers where they want to buy your product.”
In that respect Erick likens Revel to air traffic controllers. “Someone needs to own the transaction, have it documented, and make sure the correct amount of money changes hands. We’re the engine that does this and we don’t have the R&D to build everything.” That’s why Revel is looking at best-of-breed partners while they focus on building what they think is a best-of-breed POS. Erick acknowledged that while Revel can offer a decent OEM’d bolt-on for smaller merchants, it’s not going to fly with larger customers. “Larger customers need third parties because we can’t always deliver the granularity of functionality they require without big trade-offs in our core product, and frankly signing up to deliver that is a stupid business decision.”
Revel is also working to reestablish a channel. According to Chris, “We need to add diversity to our sales pipeline and we think channel is the right way to achieve that. Plus, with all the turmoil in the market over locked-in processing POS systems we believe there’s a segment of the channel looking for a good cloud POS.”
There’s been some fairly recent news about Revel’s partnership with Worldpay so we probed a little deeper. “Look, we still support all major payment providers,” Chris clarified. “When we get a new customer that doesn’t have a payment provider we’ll recommend Worldpay. The reason is two-fold: First, we believe Worldpay’s solutio set to be better and richer. We found Worldpay to have a better mousetrap for EMV, faster funds settlement, and overall a better portfolio of integration options. Second, the economics are better for our merchants.” You may recall that Revel had a similar relationship with TSYS previously and this new relationship with Worldpay supplants it.
Revel has some more exciting news around its financial stability and growth, but we’re saving that for our next report. “We want the market to know that we’re here, we’re not going anywhere, and we’re the responsible, experienced cloud POS,” beamed Chris.
As he should: this certainly is a 180 from what WCAS bought two years ago.
