Snackpass is a social food ordering app that focuses on takeout rather than delivery. Snackpass partners with local restaurants to offer discounts and users connect with their friends on the app to send them gifts or redeemable rewards points. Snackpass was built on the insight that people want to be social with their food. I sat down with two of the three co-founders, Kevin Tan and Jamie Marshall, to learn more about Snackpass and how they are bringing creativity to the food app ordering market.
Growth in Food Ordering Apps Market
At mealtimes food ordering apps are ubiquitous for busy individuals, whether singles, families, or working professionals. The food delivery app market has grown significantly in the last few years and is expected to $40B by 2021. A number of well capitalized companies, like DoorDash, Uber Eats, GrubHub, and PostMates compete for dominance in this space. In February 2019 DoorDash raised $400 million at a valuation of $7.1 billion and overtook GrubHub to be the market leader with 34% market share. UberEats is a key growth driver for Uber bringing in $1.46B in revenue last year. For a new startup to succeed in this space they need to be thoughtful about approaching a market that these larger companies have overlooked and creative in their execution to stand out in the crowd. Snackpass, a venture started at Yale University, is doing just that through a social food ordering app that focuses on pickup rather than delivery.
Easy Ordering and Food Pickup for Students
Snackpass was founded in 2016 by 3 students, Kevin Tan and Jamie Marshall, at Yale University, and Jonathan Cameron, at The Ohio State University. At the company Tan leads product and engineering, Marshall leads operations and launch, and Cameron leads restaurant sales development. Snackpass is a mobile food ordering app that allows students to order food from local restaurants while receiving discounts and collecting rewards that can be redeemed for additional items. The app allows students a quick and easy way to order, skip the line, and pick up their food.
Tan described the early days of Snackpass at Yale and shared, “At the very beginning, It started as a website that I made in my dorm room to get student discounts. Once I made the site, we started flyering dorm buildings, the library, and it picked up from there. We have made a lot of pivots since then, but the core concept of bringing convenience and discounts to students has stayed the same.” Tan continues, “One of our first pivots was that we wanted a way for everyone to tell their friends about Snackpass. We created that word-of-mouth with gifting, where students could gift their friends food or rewards points that could be used at different restaurants.” This social component is key to Snackpass’ differentiation, virality, and active user base among students on college campuses. Users love to share rewards with their friends, constantly bringing their community together, and it shows with how quickly the platform has grown in the last few years. To date Snackpass has a reach of over 50,000 students and has expanded to 16 university campuses, including UC Berkeley, MIT, Brown, and University of Pennsylvania.
Snackpass is currently available at 16 college campuses and continuing to expand this fall.
Great for Students and Local Restaurant
As a platform product, users are only part of the equation and restaurants stand a lot to gain by using Snackpass. Jamie Marshall explains, “We work with restaurants near college campuses. A lot of those businesses are mom and pop restaurants that students are most likely to go to.” Snackpass partners with these restaurants to offer mobile ordering, loyalty programs, targeted promotion campaigns, and a customer analytics platform. This way, restaurants can focus on what they do best and Snackpass can provide users with the services they want today. Beyond mom and pop restaurants, Snackpass also partners with franchises at a national level so that, “when we go to a new city, we have a partner there to launch with.” Marshall elaborates, “We look to get into the key restaurants that are on every college campus. Before we go to a new campus, we make sure it’s walkable, that there are restaurants that might be valuable to work with. We talk to tons of students. But it’s important to note that the main features of convenience, discounts, and social elements are constant across all campuses. It’s also important to get the right students involved early to get Snackpass to spread as fast as it can.”
Snackpass resonates with users because it’s an app for students, built by students. The company was part of Y Combinator’s Winter 2018 cohort and the team continually utilizes key lessons from the accelerator. ‘They pushed is always talk to your customers,’ Marshall comments. ‘That was easy because we were on campus and we made a big point about talking to everyone about how we could make Snackpass better for them. This is super important as we go to new campuses, because each campus has its own nuances to take in.”
Customer Focus Drives What’s Next
Listening to customers has driven their new feature pipeline and in the fall Snackpass will begin rolling out a meal plan. Marshall notes that this new product will lead to more restaurant partnerships. She explains, “the Snackpass meal plan allows parents, coaches, or anyone to load money onto a student’s Snackpass account that students can spend at restaurants. In the future we’re considering starting corporate meal plans because companies want to give their employees perks around town and this would be a great area for Snackpass to get involved in. This is just one of the things we want to explore as we expand to non-college locations down the road.”
“…the Snackpass meal plan allows parents, coaches, or anyone to load money onto a student’s Snackpass account that students can spend at restaurants. In the future we’re considering starting corporate meal plans because companies want to give their employees perks around town and this would be a great area for Snackpass to get involved in. This is just one of the things we want to explore as we expand to non-college locations down the road.”
– Jamie Marshall, Snackpass Co-founder
Investors have taken notice of the Snackpass team and their exciting, growing venture. They have raised $120K through Y Combinator and an undisclosed seed round with First Round Capital. Given their recent funding the team will determine the timing for their next raise in the coming months.