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The Spoon

Daily news and analysis about the food tech revolution

Good Uncle

Snackpass Raises $21M Series A Round for Its Order-Ahead Food App for Students

Order-ahead food app Snackpass has raised $21 million in Series A funding in a round led by Andreessen Horowitz with participation from First Round, General Catalyst, YCombinator and Inspired Capital. The round brings total funding for Snackpass to $23.7 million.

Snackpass was founded in 2017 at Yale University. Though the company has since relocated headquarters to San Francisco, its focus, for now, remains on college campuses. The app is currently available at 11 schools around the U.S., and Snackpass said in a press release it will use the new funding to expand to 100 campuses over the next two years.

With the app, Snackpass users can order and pay for food then pick it up at the restaurant. (There is no delivery functionality at present.) Where the company sets itself somewhat apart from the food app pack is with its social features and loyalty program. Users earn loyalty points that can be redeemed for free food, either for themselves or friends. The latter highlights the social aspect that’s a major centerpiece of Snackpass’s strategy. Built into the app is a Venmo-like feed where each purchase a user makes shows up and where people can communicate with one another, get restaurant recommendations, and send gifts (i.e., free food).  

This emphasis on creating a community within the app is one of the reasons Snackpass has been able to maintain something other food delivery apps struggle with: a loyal user base. Third-party delivery may be on track to have 44 million U.S. users in 2020, but most of those people hop between apps, more interested in finding the best deals on food than claiming allegiance to, say, DoorDash versus Uber Eats. 

A loyalty program, which is different from subscription models many of the big-name food delivery apps offer, is also key to keeping Snackpass users coming back. The company claims a 75 percent penetration rate among students within six months of being on a college campus. The service can also sync with students’ campus meal plans.

Right now, college campuses are fertile grounds for testing new approaches to food delivery. Though unique, Snackpass is hardly the only app out there catering to students. Earlier this year, food delivery app Good Uncle was acquired by Aramark, a longtime food services provider for colleges and universities. In 2018, Grubhub acquired Tapingo, an order-ahead app for college students that’s at 150-plus schools.

Those are only a couple names in the pack. DoorDash, Allset, and others are also making their way to schools in the U.S., and the competition for college students will intensify as we head into 2020. The new funds, as well as having a name like Andreessen Horowitz in their court, will hopefully give Snackpass enough financial and operational muscle to stay in the center of that competition.  

Newsletter: Back-to-School Delivery Apps and High-Tech Sushi Burritos

While my colleagues are across the Pacific this week at the SKS Japan show, I’ve been thinking about college. Specifically, how college and university campuses are a lucrative frontier for food delivery.

Unless you’re in an urban campus like NYU, where delivery, takeout, and street food options already abound, the average college campus has everything a food-delivery service could want in terms of customers: lots of bodies packed tightly together, pulling late hours in locations where food isn’t always a given (e.g., the library).

Third-party delivery services like DoorDash and Grubhub already provide a presence on campuses, along with a much-needed alternative to soggy spaghetti and stale Cheerios. But for bigger corporations who’ve long been a part of the university foodservice world, third-party delivery is a competitive threat to their very relevance on campus.

Not surprising, then, that some of these legacy foodservice companies are starting to respond with their own contributions to delivery. This week food services provider Aramark, who works with more than 400 universities in the U.S., announced it had acquired meal delivery company Good Uncle.

Via Good Uncle’s app, students can order chef-made meals and snacks that are typically cheaper than the average restaurant and don’t have delivery fees. While Good Uncle’s reach is relatively small right now, serving just eight campuses, its business model makes a lot of sense for an older company like Aramark trying to stay relevant to students in the food delivery era.

Exactly how Aramark will leverage this new acquisition remains to be seen, but it’s a smart move to get into the delivery space now. Grubhub has already been working its way onto campuses via its 2018 acquisition of Tapingo, and a growing number of delivery bots on campus brings both new ways to do food delivery for students and more competition for existing players. That includes Aramark rival Sodexo North America, who this year partnered with Starship Robotics to unleash fleets of wheeled bots onto college campuses.

An Eatsa-style Empire in Japan

But back to Japan.

My colleague Chris Albrecht got to experience not one but two awesome food-centric things this week: sushi burritos and high-tech restaurants.

Chris headed over to Beeat Sushi Burrito, a Tokyo restaurant that serves sushiritos and is powered by an end-to-end system that automates most of the order, pay, and pickup process for customers.

As Chris noted, though, UBO, the company behind the restaurant, is more focused on tech than food:

“Instead of selling sushiritos, UBO has developed the entire system from the software platform to the cameras installed in the cubbies that read the special QR codes that identify each order. UBO wants to license its tech stack to other restaurant chains, who can then integrate the automat style of eating into their own locations.”

It’s not unlike the Brighloom (nee Eatsa) system here in the U.S., which is an end-to-end restaurant tech stack that automates much of the customer’s restaurant experience and will do so even more now that it’s licensed some of Starbucks’ technology.

So while a sushirito empire isn’t the end goal for UBO, Beeat Sushi Burrito is another example of how the restaurant experience is getting automated and suggests we’ll see many more iterations of this in future, on either side of the Pacific. And, most likely, in colleges and universities, too.

Until next time,

Jenn

Aramark Acquires Campus Food-Delivery Service Good Uncle

Just in time for school to start again, food services provider Aramark announced today it has acquired Good Uncle, an on-demand meal-delivery service that drops food to students at specific pickup points around college campuses. Terms of the deal were not disclosed.

Good Uncle launched in 2016 and has raised a total of $2.2 million. The service, accessible via an iOS or Android app, aims to offer college and university students restaurant-quality meal options at student-friendly prices, including free delivery.

To order food, students first sign up with the Good Uncle app and choose items from a menu that rotates every couple of weeks. Certain campuses also feature 15-week membership plans that theoretically could function as an alternative, or at least a supplement, to a traditional student meal plan purchased from the university.

Good Uncle partners with local chefs to make the food and uses its own fleet of vehicles to deliver meals. All food is delivered at drop points on or around the campus. When a user purchases a meal, they choose one of these designated points, marked in the app, and are given an estimated time for how long the food will take to arrive at that point. The Good Uncle site claims an average of 26 minutes for most orders. Payment and order tracking are available through the app.

Aramark, meanwhile, is a longtime food services provider to universities and currently works with over 400 of them in the U.S., offering everything from dining hall services to convenience stores and coffee shops. But thanks to delivery, restaurant-quality food is easier and faster than ever for students to get their hands on, which means slimy spaghetti and endless bowls of cereal from the dining hall aren’t the only options anymore. For Amarak, acquiring a company like Good Uncle is a way to stay relevant as the campus culinary landscape changes.

And it’s definitely changing — specifically to meet the demands for delivery. In 2018, Grubhub acquired Tapingo, whose platform lets students order ahead at on-campus restaurants, cafes and dining halls. And universities are also a hot testing bed for delivery robots, with companies like Starship and Kiwi sending their bots to roam about the quad delivering meals and snacks to hungry students.

Right now, Good Uncle is available on eight campuses in the U.S. According to the press release, the company will operate independently of Amarak and maintain its own unique brand identity. Even so, linking up with a larger company like Aramark, which has a long history and wide reach with universities, could enable Good Uncle to expand to new campuses and compete with the plethora of delivery technologies currently headed back to school.