The New York-based startup launched its free sign-up service last July to allow rideshare drivers to sell candy and snacks to passengers, including Kind Snacks, Mars’ Extra gum and Cheeze-It.
$5.5m investment
Cargo’s founder and CEO Jeff Cripe told BakeryandSnacks this is the company’s second round of funding and eighteen94’s first investment in a distribution channel rather than an ingredient or a consumer product.
“I know it was in their mandate when Kellogg created eighteen94. Part of their strategy is making investment in new distribution channels that have not been available,” Cripe said.
“It would be helpful to get into the rest of Kellogg’s portfolio and brands... maybe their rice crispy bars, snack bars and breakfast goods... but there was no stipulation in our investment that Kellogg will continue working with us as a client. It’s two separate businesses.”
Cripe said Cargo started working with RXBar before Kellogg acquired the nutrition bar company last year.
Cargo's first investor was CRCM Ventures.
“CRCM Ventures had invested in the consumer internet and mobility space, so we looked at them as somebody who could add value to our team,” said Cripe.
The two firms have together invested $5.5m in expanding Cargo’s business, exceeding the company’s initial $5m fundraising target.
Expanding into new cities
Cripe said, although there is an emphasis on healthy eating among consumers, some of the more indulgent confections and salty snacks are Cargo’s top performers.
“There are certain times during the day when we see a spike in consumption, such as after work, at night, and the early hours in the morning,” he said.
Cargo has experienced a 55% month-over-month growth in revenues since it started and now has over 20,000 drivers across New York City, Boston, Chicago and Minneapolis.
“We will be rolling out to at least six new cities in 2018, including Los Angeles, Dallas, San Francisco and Seattle,” Cripe said.