Our Investment in Snackpass: The Social Layer of Food
Grabbing a meal from your favorite restaurant to catch up with friends, colleagues, and family was one of the most missed, taken-for-granted activities that was halted during the heat of the pandemic. Given the connection between enjoying food and social interaction, it’s fascinating that to-date, despite massive VC investment across Food Tech (the industry took in $18B+ of funding in 2020) no company has created a truly modern social experience tied in with enjoying a meal in a way that resonates with our increasingly-on-the-go lifestyle.
Some of the most successful companies in Food Tech have centered around solving the last-mile-logistics challenge around Delivery, and for good reason given the convenience companies like recently public Doordash and Deliveroo offer. However, despite Delivery dominating all the headlines, the broader Takeout market is still several magnitudes larger. The reality is there’s a limit to the frequency the typical consumer can spend $20-30 per meal (the typical AOV for delivery platforms), so providing a similarly seamless but lower priced Takeout channel can be extremely complementary.
That being said, the majority of Takeout spend is still inconveniently Offline, but similar to Delivery, we believe the future of Takeout will be Mobile-driven. In a world where companies are increasingly leveraging customer data to segment and influence their highest LTV customers, the Offline takeout experience relies on much less predictable foot traffic. Offline takeout means anonymous customers, no rewards for power users, manual cashier processing, long lines and high labor costs.
Today, we’re excited to announce our continued backing of a company we believe will bring Takeout into the digital age by leveraging the first P2P mobile-based social feed for food.
Snackpass is a mobile platform for Takeout ordering that has won the hearts (and stomachs) of college students around the country with it’s Gen Z resonating, viral social features. At its core, Snackpass offers users a mobile platform to pre-order Takeout at local restaurants–with no menu markups or added fees. Orders on the platform allow the original user to earn reward points (i.e. towards free or discounted food) on their digital punch card, but ALSO gift points to another friend in their network for use at that same restaurant. The result is a strong viral effect where users are incentivized to be ordering takeout on the same platform to help each other earn rewards quicker. On top of this gifting feature, Snackpass has layered a Venmo-like social feed where users can see gifting activity in their network, which has been incredibly well embedded into the social fabric of college campuses. This social transparency and social currency has made Snackpass instantly viral on campuses both online and in-stores as you can see in their Careers page.
But this isn’t just a consumer phenomenon. For restaurants, Snackpass drives tangible value by driving repeat business via built in retargeting and loyalty features, new customers through access to the aggregated Snackpass user base, reduction in labor costs, increased throughput with more predictable and often bulk pre-orders, and digital followership for their local brands.
The Future is Looking Delicious
GC first met co-founders Kevin Tan and Jamie Marshall in 2017 when they launched Snackpass at Yale during their undergraduate studies. We were fortunate to make our initial investment in their pre-seed round through our Rough Draft Ventures (RDV) program and have had a front row seat to witness their growth and evolution since the beginning. Today, Snackpass is present in dozens of additional marquee campuses across the country such as Princeton, Berkeley, Harvard, Michigan, etc. When they launch a new campus, they quickly get to ~80% penetration within a matter of months. The visionary leadership team has proven the ability to continually re-invent themselves by finding new ways to serve and engage the users and restaurants they partner with. New features such as synchronous group ordering through “Party Mode” (don’t underestimate the impact a few dollars of savings can have on college students) and their ability to create partnerships with off-campus grocery store chains and restaurants in cities where their graduating user base is moving to have us convinced they’re early in their journey to create the dominant social ecommerce layer for restaurants everywhere (and beyond).
Deepening our Partnership
Today, we’re elated to announce our continued partnership with Snackpass in their $70M Series B round alongside our friends at Craft Ventures, Andreseen Horowitz, and a notable group of strategic angels across entertainment, food and more.
Lastly and most importantly, thank you to Kevin, Jamie, and the rest of the Snackpass team for allowing us to join your journey. We’ve been humbled to be in your corner since the beginning.