When Tim Sardinia’ s grandfather was an accountant in Mount Morris, his clients included local farmers.
“I remember being a little kid and seeing them come through the house with chickens and eggs,”Sardinia said. “They were doing that because he was doing their accounting work for free.”
The intersection of gifting and business wove into and out of Sardinia’s consciousness for years as he built a career, as a partner in specialty finance firm Millenium Funding and as a well-known restauranteur whose holdings include JuiCY Burger and Carte Blanche.
Now it forms the basis of a technology startup, Favordrop, backed by big names in Buffalo’s business community.
The fundamental insight at Favordrop is that gift cards stink. There is no way to track whether they have been used – large corporations often give out six- to seven-figure sums of unused gift cards each year – and there is no efficient way for gift card recipients to remember them once they’ve been forgotten. They’re not inherently social. They rarely favor local businesses.
Favordrop uses software – it has a patent pending on its payment-feedback system – to turn gifting into an interactive, efficient, trackable experience, its partners say. If a gift isn’t used in a prescribed time period, it comes back to the person or company who sent it.
Favordrop has raised $725,000 in pre-seed funding this year and is launching a pilot this fall with five local corporations, which will send out hundreds of thousands of Favordrop text messages to employees and external partners.
Sardinia worked with Gregg Mojica, a Western New York native who is now co-founder and CTO of fast-growing Brooklyn startup Alloy Automation, to build the initial technology framework. Mojica is an equity holder in Favordrop and still supports its technical development.
The companies day-to-day operations are now run by Tim’s son, Jack Sardinia, who has a bachelor’s degree from Georgetown University, a master’s degree from Columbia University and was working in health care analytics in Washington, D.C. when the idea was broached last year.
“I was at dinner with my dad and Gregg and they said, ‘We want you to run this,” Sardinia said. “At first I was like, ‘what?’ But when you talk to people about the potential of this idea, you can see it on their face. I may never get an opportunity like this again.”
Favordrop launched last year with local restaurants as a consumer-based gifting tool between friends. You could, for instance, send a pal a Favordrop for a free beer at a bar you’re sitting at, but time it to expire within an hour.
But the scope of the idea changed when running the company through the Georgetown Startup Accelerator in late 2021 and bringing on key advisers in Chris Feeney, chief financial officer at Delaware North; Dan Magnuszewski, the co-founder of ACV Auctions who is now chief technology officer at Foundry Digital; and Devin Baptiste, the CEO of Groupraise.
Jack Sardinia started bringing the idea to corporate leaders. The spark was immediate.
“We found there was overwhelming interest,” he said. “There is a huge market for corporate giving internally, and there is huge potential here to build customer-relationships.”
The major focus right now is on executing the pilot project, and taking those insights to improve the business. Favordrop has 30 merchants that use the platform, from restaurants to retail to fitness facilities, and said they are actively onboarding new merchants.
The idea for now is that the corporate partners gain access to Favordrop through a software-as-a-service license, while individual users and merchants use it for free.
The company will likely be built on a region-by-region basis, scaling with corporate partners and then onboarding the merchants they want to work with.
Who could argue with an easier way to give?
“We have all have a desire to give and to be kind, and when you get in front of CEOs, the light bulb goes off,” Tim Sardinia said. “This makes it easy for them to do what they’ve always wanted to do, and by the way, it has all the attributes to make it more effective.”
Favordrop investors include Magnuszewski, the S2 Ventures group, Trusted Nurse Staffing, Paul and Howard Rich and others. The company also applied to the 43North competition this year.
Favordrop is one of 24 local companies to acknowledge a private, growth-oriented round of funding this year. The list includes Torch Labs ($40 million), Centivo ($30 million), Circuit Clinical ($29 million), Kangarootime ($26 million), SparkCharge ($22 million), PostProcess Technologies ($5 million), VeriTX ($4.5 million), HELIXintel ($4 million), Blockfusion ($2.6 million), ShearShare ($2.3 million), Azuna Fresh ($2.5 million), Patient Pattern ($2 million), OneBridge Benefits ($2 million), BetterMynd ($1 million) Empire Hemp Co. ($1 million), Buffalo Film Works ($750,000), Favordrop ($725,000), Cahill Tech ($500,000), Ellicottville Greens ($300,000), Swift Rails ($255,000) AireXpert ($125,000), Arbol ($110,000), Lemma Labs ($100,000), Timberhut (undisclosed) and Ognomy (undisclosed).
