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.
