The United States is the richest country in the world. One in eight Americans receive government assistance to buy their weekly groceries, which translates to 42 million Americans who receive food assistance from the government Supplemental Nutrition Assistance Program, also known as SNAP. The recipients of SNAP make their food purchases through brick-and- mortar grocery stores. Enter Forage, a USDA-approved third-party payment processor TPP and a PIN provider that authenticates and processes EBT transactions. SNAP recipients can use their benefits to purchase groceries online. Forage enables grocers to accept SNAP EBT, previously known as food stamps, Forage has raised a $22 M Series A funding round to speed up online grocery access for America's 42 million SNAP EBT recipients. The round was led by the Fintech specialist firm Nyca, with participation from PayPal Ventures, EO Ventures and prominent angels, including Apoorva Mehta, founder of Instacart. Forage will use funding proceeds for product development and accelerate hiring to meet the high demand for the company's solutions.
Forage, founded in 2020, makes it easier for grocers to accept SNAP EBT food stamps payments online, giving merchants access to a $200 B market and allowing 42 M Americans to spend them online. Forage guides merchants through the USDA application process and tech integration for merchants, taking most of the burden off retailers.
Forage's founders created the company to democratize access to government benefits and help underserved Americans access their benefits online. Forage works with a number of grocers and platforms such as Shopify and Flashfood to accept SNAP EBT payments online.
According to a statement from Forage, Ofek Lavian, co-founder and CEO of Forage, said this capital will help speed up Forage's mission to democratize access to government benefits. We are proud of the technology we have built and are excited to expand the acceptance of SNAP EBT payments online for low-income Americans. One in eight Americans receive government assistance to buy groceries. More than 250,000 brick mortar locations accept SNAP benefits via EBT in-store, but only a fraction has been approved for online EBT. Many SNAP recipients are homebound, lack transportation, or live in a food desert without easy access to grocery stores, and many others want to avoid in-person shopping due to concerns about COVID. SNAP recipients were not afforded this safety and convenience because they were not able to use their benefits online during the pandemic, while many Americans were able to shift to online grocery shopping.
Forage has an in-house team of EBT and payments experts, including former Instacart and Freshop employees. In addition to its stand-alone EBT solution, Forage developed and recently launched the first Shopify app that offers online EBT payment processing to Shopify's ecosystem of merchants. The company is working with dozens of well-known grocers to speed up their path to accepting SNAP EBT online.
Tom Brown, Partner at Nyca Partners, said that Forage is tackling a critical problem for consumers and merchants as more groceries are bought online. Nyca is excited to back the incredible team on their mission to make it easy for eligible merchants to accept EBT as any other form of payment. Forage provides merchants with support throughout the USDA approval process, from preparing the required documentation, through system engineering and testing to deployment, making it easier for new merchants to accept EBT online, with the goal of opening up the online EBT space to more merchants and ultimately more SNAP recipients.