Americans have an insatiable appetite for snacks and the idleness of the pandemic has only increased our yearning for snacks. There are countless subscription services for snack boxes and many of these companies offer gifting services to expand their market share beyond their primary customers. Recipients of a gift snack box never know what they are going to get until now. SnackMagic is a customizable snack box gifting service that allows the recipient to choose the contents of the box. All the sender needs to know is the amount they’d like to spend and the email address of the receiver. The company emerged out of a pandemic-induced pivot from a corporate lunch delivery service and is on track for a $20M ARR. SnackMagic focuses on edible gifts presently with plans to expand to meal kits, alcoholic beverages, desserts, and swag. Boxes start at $45.
AlleyWatch caught up with CEO and Cofounder Shaunak Amin to learn more about the company’s pivot, traction, future plans, and recent round of funding.
Who were your investors and how much did you raise?
We raised $15 million in a Series A round of funding led by Craft Ventures.
Tell us about the product or service that SnackMagic offers.
SnackMagic enables companies to treat their employees, event attendees, customers, and friends (anywhere in the world) with snacks and beverages of their choice. SnackMagic is the snack box that takes all the pressure off of gifting. It’s the service that lets people pick which goodies they get—so you don’t have to. Whether you’re sending to one person or 1,000, everyone has the freedom to choose from a unique menu of options. It’s the un-screw-uppable gift everybody loves.
What inspired the start of SnackMagic?
2020 was an exceptional year for SnackMagic, a company born out of a pandemic pivot in March 2020. Our previous venture, STADIUM, was a New York City-based lunch delivery service catering to corporate clients. When COVID-19 hit and offices shut down, we leveraged STADIUM’s backend systems to launch SnackMagic—a concept that saw immediate success and took us from $0 in revenue to a $20 million revenue run rate in just eight months, becoming profitable in December 2020.
How is SnackMagic different?
The wild popularity of the SnackMagic experience can be explained by four game-changers:
- Personalization: recipients build their own box, which means that everything is exactly what they’d like, customers can treat anyone to a personalized, build-your-own snack box.
- Stress-free gifting: eliminating the hand wringing of finding the perfect gifts, SnackMagic gives recipients the power to select.
- No address needed: leapfrogging the hassles of snail mail addresses, SnackMagic requires only an email address for gifting.
- Infinitely scalable: with logistics operations completely dialed in, SnackMagic can scale without losing personalization. From single orders to batches of a thousand plus, SnackMagic delivers an addictive experience for everything from corporate culture building and event integrations to personal gifting.
What market does SnackMagic target and how big is it?
With SnackMagic, you can send a snack box to anyone, anywhere in the world. This opens up our market to anyone who wants to send a gift for any reason. This includes sending a gift to employees, event attendees, clients, customers, family, and friends. Our primary audiences are companies treating their distributed team, conference organizers wanting to treat event attendees, and account executives treating their clients.
What’s your business model?
The gift-giver will set the budget at a minimum of $45 per box. Recipients can choose from over 800+ snacks and beverages from our menu and custom curate their own box based on the pre-set budget. SnackMagic also offers pre-curated themed snack boxes starting at $45/box that are available in US/Canada, International recipients can choose from locally pre-curated snack boxes.
What was the funding process like?
Before we started the fundraising process, we created a YouTube video series The Story of SnackMagic that talks about how we launched and scaled the business from $0 to $20M annual run rate in just 8 months. The video series helped create a splash.
SnackMagic has strong growth and incredibly strong repeat usage, it made the funding process quick and efficient. We started the process the second week of January of 2021. Before the end of the month, we received interest and term sheets from a few different investors.
One thing that made the process smoother was sending several videos of the pitch deck presentation to investors before the meeting. This allowed them time to prepare and we were able to have a more productive discussion.
We chose Craft Ventures as our funding partner because everyone on their team is or has been a Founder or Operator. This meant we could learn from their wide range of experiences in starting and operating a successful business.
What are the biggest challenges that you faced while raising capital?
There were no major challenges as it related to raising capital. But the process does take away time and attention from the business. It’s important to run the process efficiently where the team is not distracted. In our case, very few people were involved in the process until we were close to the finish line.
What factors about your business led your investors to write the check?
What attracted Craft Ventures to invest in SnackMagic was the clear viral growth, bottom-up adoptions, and an unbeatable team.
What are the milestones you plan to achieve in the next six months?
Over the next 6 to 9 months, we plan to diversify the “build your own box” concept into new product categories like meal kits, alcoholic beverages, dessert treats, and non-edible gifts like swag and gift baskets. We’re also looking at building greater warehouse capacity and logical support.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Having money is a nice to have, not the reason you will succeed. As a startup, you need to have a foundation built on a quality product/service offering, a solid business model, product-market fit, and listening to customer needs as you go. First, focus on nailing these things and then focus on getting one to a handful of customers at a time, then continue iterating from there. If the foundation is solid, everything else falls into place.
Having money is a nice to have, not the reason you will succeed. As a startup, you need to have a foundation built on a quality product/service offering, a solid business model, product-market fit, and listening to customer needs as you go. First, focus on nailing these things and then focus on getting one to a handful of customers at a time, then continue iterating from there. If the foundation is solid, everything else falls into place.
Where do you see the company going now over the near term?
To be a global gifting platform, users will be able to satisfy all their gifting needs through SnackMagic (beyond snacks and beverages). We’ll continue to focus on global scalable gifting where recipients can choose their gift.
What’s your favorite outdoor dining restaurant in NYC
My favorite outdoor dining restaurant in NYC is Standard Grill on 10th Ave. Something that just opened up and is great for outdoors that I want to try is The Fulton near the Brooklyn Bridge.
