In America, 41.5 million people use food assistance programs and at least one player in the online grocery sector is looking to capture that market.
Forage, a San Francisco-based fintech platform, announced Monday it raised $22 million from Instacart founder Apoorva Mehta, PayPal Ventures and fintech-focused Nyca Partners, which led the round, to make online groceries accessible to SNAP EBT recipients.
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Venture funding in the online grocery space doubled in size between 2020 and 2021, with startups receiving $8.6 million in 2021 per Crunchbase data. The rise of online grocery delivery was bolstered during the pandemic, when people were shuttered in their homes and social distancing.
Updating grocery access
But for a long time, EBT recipients in California could only shop at a handful of online grocers like Aldi, Walmart and Amazon, despite the rise in online grocery shopping. Ironically EBT recipients stand to benefit greatly from online grocery—many have mobility-related disabilities, live in food deserts, or lack access to transportation.
During the COVID-19 pandemic, an additional 6.5 million individuals began receiving some sort of food assistance, and food banks have only seen more scarcity due to rising inflation and the economic downturn.
In 2014, the U.S. Department of Agriculture piloted an initiative that would allow those using food assistance programs like SNAP to get their groceries online, and effectively made the pilot permanent in 2018 (though some states still do not allow online groceries to be paid for via EBT card).
What Forage does
Forage partners with grocery stores and e-commerce platforms to help them get USDA approval to receive EBT payments and offers an API that allows them to accept EBT cards, which function much like a debit card would.
The company plans on using the fresh funding to accelerate hiring and to further develop its product.
“This capital will help accelerate Forage’s mission to democratize access to government benefits,” Ofek Lavian, cofounder and CEO of Forage, said in a statement. “We’re proud of the technology we’ve built and are excited to expand the acceptance of SNAP EBT payments online for low-income Americans.”
Illustration: Dom Guzman
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