- Snackpass, a mobile food ordering service, announced it has raised $21 million in funding
Snackpass — a mobile food ordering service founded by Kevin Tan and Jamie Marshall — announced it has raised $21 million in funding. Currently, Snackpass is on 11 college campuses and the company saw a 75% penetration rate amongst its students within six months. The company generates revenue by taking a cut from every order and the margins are high since the users pick up the food themselves.
One of the ways that Snackpass keeps users coming back is by offering a loyalty program. The company’s rivals are known for offering deals at different times so its users keep bouncing around.
The $21 million Series A round of funding was led by Andreessen Horowitz partner Andrew Chen. Y Combinator, General Catalyst, Inspired Capital and First Round, and several angel including rapper Nas, NFL star Larry Fitzgerald, and talent agent Michael Ovitz.
This funding round builds on Snackpass’ $2.7 million seed round. And this round of funding will go towards the goal of reaching 100 campuses in two years.
“Takeout is an important market because it’s huge — also in the hundreds of billions — and fragmented,” said Chen via TechCrunch. “The opportunity complements the food delivery market in a big way: For the average restaurant, there are 6 takeout orders for every delivery order!”
The idea for the company came together based out of an idea from the needs of the founders at Yale. Tan told TechCrunch that he was inspired for the idea about Snackpass while helping a friend managing a local pizza shop to build a website in order to better reach the local student community. And they realized how challenging it was for restaurants at colleges to retain and reward customers especially as their regulars graduated.
So Tan partnered with neuroscience student and Thiel Fellow Jamie Marshall — who is now the COO of Snackpass. The founding team also includes Jonathan Cameron — who had previously launched an ordering app called Happy Hour.
Another way that Snackpass has appealed to users is the ability to send virtual gift cards to other users. And the purchases and gifts appear in a social feed unless you make it private just like Venmo.
