The office shut-down at the start of the COVID-19 pandemic last year spurred huge investment in digital transformation and a wave of tech companies helping with that, but there were some distinct losers in the shift, too \u2014 specifically those whose business models were predicated on serving the very offices that disappeared overnight. Today, one of the companies that had to make an immediate pivot to keep itself afloat is announcing a round of funding, after finding itself not just growing at a clip, but making a profit, as well.<\/p>\n
SnackMagic<\/a>, a build-your-own snack box service, has raised $15 million in a Series A round of funding led by Craft Ventures, with Luxor Capital also participating.<\/p>\n (Both investors have an interesting track record in the food-on-demand space: Most recently, Luxor co-led a $528 million round in Glovo in Spain<\/a>, while Craft backs\/has backed the likes of Cloud Kitchens, Postmates and many more<\/a>.)<\/p>\n The funding comes on the back of a strong year for the company, which hit a $20 million revenue run rate in eight months and turned profitable in December 2020.<\/p>\n Founder and CEO Shaunak Amin said in an interview that the plan will be to use the funding both to continue growing SnackMagic\u2019s existing business, as well as extend into other kinds of gifting categories. Currently, you can ship snacks anywhere in the world, but the customizable boxes \u2014 recipients are gifted an amount that they can spend, and they choose what they want in the box themselves from SnackMagic\u2019s menu<\/a>, or one that a business has created and branded as a subset of that \u2014 are only available in locations in North America, serviced by SnackMagic\u2019s primary warehouse. Other locations are given options of pre-packed boxes of snacks right now, but the plan is to slowly extend its pick-and-mix model to more geographies, starting with the U.K.<\/p>\n Alongside this, the company plans to continue widening the categories of items that people can gift each other beyond chocolates, chips, hot sauces and other fun food items, into areas like alcohol, meal kits and nonfood items. There\u2019s also scope for expanding to more use cases into areas like corporate gifting, marketing and consumer services, as well as analytics coming out of its sales.<\/p>\n Spain\u2019s Glovo picks up $528M as Europe\u2019s food delivery market continues to heat up<\/a><\/p>\n<\/blockquote>\n\n Amin calls the data that SnackMagic is amassing about customer interest in different brands and products \u201cthe hidden gem\u201d of the platform.<\/p>\n \u201cIt\u2019s one of the most interesting things,\u201d he said. Brands that want to add their items to the wider pool of products \u2014 which today numbers between 700 and 800 items \u2014 also get access to a dashboard where they monitor what\u2019s selling, how much stock is left of their own items, and so on. \u201cOne thing that is very opaque [in the CPG world] is good data.\u201d<\/p>\n For many of the bigger companies that lack their own direct sales channels, it\u2019s a significantly richer data set than what they typically get from selling items in the average brick and mortar store, or from a bigger online retailer like Amazon. \u201cAll these bigger brands like Pepsi and Kellogg not only want to know this about their own products more but also about the brands they are trying to buy,\u201d Amin said. Several of them, he added, have approached his company to partner and invest, so I guess we should watch this space.<\/p>\n SnackMagic\u2019s success comes from a somewhat unintended, unlikely beginning, and it\u2019s a testament to the power of compelling, yet extensible technology that can be scaled and repurposed if necessary. In its case, there is personalization technology, logistics management, product inventory and accounting, and lots of data analytics involved.<\/p>\n The company started out as Stadium, a lunch delivery service in New York City that was leveraging the fact that when co-workers ordered lunch or dinner together for the office \u2014 say around a team-building event or a late-night working session, or just for a regular work day \u2014 oftentimes they found that people all hankered for different things to eat.<\/p>\n In many cases, people typically make separate orders for the different items, but that also means if you are ordering to all eat together, things would not arrive at the same time; if it\u2019s being expensed, it\u2019s more complicated on that front too; and if you\u2019re thinking about carbon footprints, it might also mean a lot less efficiency on that front too.<\/p>\n Stadium\u2019s solution was a platform that provided access to multiple restaurants\u2019 menus, and people could pick from all of them for a single order.\u00a0The business had been operating for six years and was really starting to take off.<\/p>\n \u201cWe were quite well known in the city, and we had plans to expand, and we were on track for March 2020 being our best month ever,\u201d Amin said. Then, COVID-19 hit. \u201cThere was no one left in the office,\u201d he said. Revenue disappeared overnight, since the idea of delivering many items to one place instantly stopped being a need.<\/p>\n Amin said that they took a look at the platform they had built to pick many options (and many different costs, and the accounting that came with that) and thought about how to use that for a different end. It turned out that even with people working remotely, companies wanted to give props to their workers, either just to say hello and thanks, or around a specific team event, in the form of food and treats \u2014 all the more so since the supply of snacks you typically come across in so many office canteens and kitchens were no longer there for workers to tap.<\/p>\n It\u2019s interesting, but perhaps also unsurprising, that one of the by-products of our new way of working has been the rise of more services that cater (no pun intended) to people working in more decentralised ways, and that companies exploring how to improve rewarding people in those environments are also seeing a bump.<\/p>\n Just yesterday, we wrote about a company called Alyce raising $30 million for its corporate gifting platform<\/a> that is also based on personalization \u2014 using AI to help understand the interests of the recipient to make better choices of items that a person might want to receive.<\/p>\n Alyce is taking a somewhat different approach than SnackMagic: it\u2019s not holding any products itself, and there is no warehouse but rather a platform that links buyers with those providing products. And Alyce\u2019s initial audience is different, too: instead of internal employees (the first, but not final, focus for SnackMagic) it is targeting corporate gifting, or presents that sales and marketing people might send to prospects or current clients as a please and thank you gesture.<\/p>\n\n
\n