Grubwithus, the social dining network and 2011 Y Combinator grad, announced today that it has secured $5 million in new funding to snack on, led by GRP Partners with contribution from Lebanese entrepreneur Michel Daher, who is best known as the founder of Daher Foods and its Master Chips and Poppins cereal brands, two of the largest consumer packaged goods brands in the MENA region.
The startup’s Series A round follows the $1.6 million in seed funding it raised this time last year from a slew of prominent investors, including Andreessen Horowitz, First Round Capital, NEA, SV Angel, Ashton Kutcher, Yuri Milner, Matt Cutts, Paul Buchheit, Alexis Ohanian, and Start Fund — to name a few. As a result of the new round, GRP Partner Mark Suster will be joining the startup’s board of directors.
Grubwithus launched in 2010 with a simple mission: To help introduce you to new friends (and complete strangers) over a classy meal. Really, the startup considers itself a pioneer of what it calls the “in real-life movement,” in which online platforms (Like Meetup, for example) facilitate the movement of our digital social networks offline — the goal, in Grubwithus’ case being to get us off the couch and interacting with new people while eatin’ some good grub.
To do so, the startup has constructed a model that aims to send groups of friends and strangers to a new restaurant by giving the merchant guaranteed business in the form of a prearranged number of seats under one prix fixe bill, while exposing hungry diners to like-minded new friends and new local restaurants. All users have to do is show up with an appetite, ready for some conversation, and Grubwithus takes care of the details — finding your table mates, check-splitting, tipping, etc. And, to make money, the startup attaches a service fee, which on average, works out to be between $2 to $3 per reservation.
The startup launched its iPhone app in January, which extended all the functionality of its website to your iPhone, enabling users to search for and book meals on the go, purchasing seats via its secure mobile payment offering, along with a number of social features to allow you to, among other things, chat with other diners.
On top of that, users of Grubwithus’ app have the ability to scroll through the activity feeds of their friends and receive notifications when friends book a meal, making it easier to discover new meals.
Since January, the startup has returned to focus on its web experience, redesigning its site to enhance the user interface and ease of use, adding navigation tabs, “Groups” functionality, profile recommendations, and a simplified process for user-created meals. As a result, since the beginning of the year, 42 percent of meals in Grubwithus’ major cities (Chicago, New York, San Francisco, and LA) were user generated and 58 percent were created by Grubwithus, compared to its non-major cities, where nearly 100 percent of all meals were user generated.
Today, the startup has grown to a team of 14, has held meals in 50 different cities, and has seen its user base double over the past six months. It’s growth is accelerating, but not exactly exploding, having registered over 20K downloads of its iPhone app since January.
Thus, utilizing its new growth capital effectively will be important and, to that point, the team plans to use its financing to develop its restaurant portfolio, create additional marketing channels, continue to enhance the user experience of its website, along with beginning to drive expansion into international markets — an area where Michel Daher can no doubt provide guidance.
In the near term, the startup plans to launch complementary business segments, including last-minute group get-togethers and happy hours in an effort to capture new users and continue appealing to its existing user base.
The startup has an effective business model, which one can see carrying over well to other verticals. Because Grubwithus makes an effort to establish lasting relationships with restaurants and goes out of its way to ensure that they make money off each meal, it can potentially reduce friction as it moves into new markets. What’s more, users are going to Grubwithus meals not for the discount but for the social experience, so inherently they are of more value to proprietors than Groupon’s deal hunters.
It continues to be an exciting idea and the startup has executed well in its iterations on the feature base and user experience of both its website and iPhone app. Both are a pleasure to use. It will be interesting to see how its model scales.
For more, find the startup at home here.
