Localvore, a Burlington, Vt.-based company offering a new approach to discounts at local small businesses, recently closed on $1 million in seed funding and announced plans to expand further in the Twin Cities.
Private investors from Vermont and Minnesota came together to complete the financing round, Localvore said in a release. Twin Cities angels Devin Vander Schaaf and Gage Griffing also participated.
Localvore has now raised $3.6 million in total funding, according to Crunchbase.
The completion of the $1 million seed round represents the beginning of Localvore's nationwide rollout and expansion into the Twin Cities. So far, the company has partnered with 50 Minnesota breweries, restaurants and small businesses, including Finnegans, Royal Foundry and Number 12 Cider.
The company officially launched in the Twin Cities this fall and currently has just over 100 local users. White expects this number to increase quickly. The company has activated more than 1,000 people in Vermont since its official launch at the beginning of 2019.
"Minnesota is a big market for us," Localvore CEO Dan White told Minne Inno. "We were really drawn to how diverse the agricultural community is here. It's a lot like Vermont in that way – it's the exact consumer demographic that we're looking for."
Localvore's "passport" allows users to access dozens of deals at local small businesses. This could include free appetizers or a specialty cocktail only available to passport holders.
Some offers are one-time use per customer while others renew and refresh every day, weekly or monthly, meaning they can be redeemed multiple times. And most coupons don't expire. The platform is free for businesses to use. Customers can pay $9.95 per month or $99 per year for access to Localvore. About $1 of every user's monthly subscription goes to a local food-based charity in their community.
Localvore has been in the works for nearly eight years. White and Griffing met while in college at the University of Wisconsin-Madison and joined Chicago-based Groupon in 2010. Both worked as sales reps and helped roll out new markets around the country. After leaving Groupon, White felt that there had to be a better way to offer local deals with small businesses.
"We created Localvore to solve the discount-centric branding model of the deals," he said. "It was a real pain point for these companies because they still had to put their brand name next to something that sounded like a coupon – it sounds like you're devaluing it."
White and his co-founders started Localvore on a basic Wordpress site in 2012. After bootstrapping for several years, the company reached more than $1 million in gross sales in 2016. Around this time, they decided to pivot to a subscription model.
"We really felt that was our long-term future," White said.
In the coming months, Localvore plans to roll out a directory that will allow users to rate the businesses that they visit. White also hopes that it will become a forum for travelers to find places loved by locals. The debut of the directory will also mark the beginning of Localvore's national expansion.
"We don't want to just be a standalone deals app or coupon book," White said. "That's our revenue model, but we're really trying to build a platform that strengthens local communities."
