Seventh in a series of profiles of Y Combinator Winter 2011 startups.
Grubwithus, a group-buying-meets-online-dating startup out of Y Combinator, is hitting Boston this week. The startup is introducing its group meals for strangers service in the city on June 1st.
Similar to Groupon, Chicago-based Grubwithus works with restaurants to offer its users discounted meals. Unlike daily deals customers, Grubwithus users are signing up specifically to eat a meal with a group of people they haven’t met before, “The reason people use us isn’t for financial utility, it’s for social utility,” co-founder Eddy Lu told me when we chatted earlier this month.
Lu and his team first thought of the company idea when they moved to Chicago and had trouble figuring out how to make platonic friends off the bat. “At bars, it’s just so hard making friends there,” he says. “It’s easier to ask a girl on a date at a bar than make a friend there.” (Not that people aren’t using Grubwithus to date. More on that later.)
Grubwithus launched last August in Chicago, by offering one family-style meal session a week that interested users could sign up for. Restaurants offer each meal (including tax and gratuity) at a roughly 30 percent discount, but Grubwithus makes it money by tacking another 25 percent to 30 percent onto that price, Lu says. (Even with the fee, Grubwithus customers still get a slight meal discount, on top of meeting new people.) The price per meal increases 50 cents per seat with each successive user, with Grubwithus giving the more adventurous diners a discount for signing up for a meal without knowing who will be there. Meals typically range from five to 24 people, with about eight people being the optimum number, Lu says.
There are three main types of people that use Grubwithus, Lu says: consultant types looking for company while on business travel, people who have just moved to a new city, and people who are single and want to meet new people. “We have girls tell us they would never want to use a dating site, but they use us,” he says. “It has aspects of a dating site, but not that stigma.”
Grubwithus has eight full-timers and has raised about $1.6 million from investors like Andreessen Horowitz, SV Angel, First Round Capital, NEA, and Ashton Kutcher (yes, the actor). The company’s goal is to be up and running in 30 U.S. cities by the end of the year, Lu says. Beyond Boston and Chicago, strangers are using the site to dine together in San Francisco, New York, DC, and Los Angeles at this point. Between 350 and 400 meals have been shared as a result of Grubwithus, and 30 percent of people who have gone on one meal have signed up for a second, Lu says.
In its next phase, Grubwithus will also focus on being a platform for users who want to host more targeted dinners, for industry groups and the like. It’s also starting to let customers use the site for hosting their own private dinners for social parties. They like Grubwithus because tax and gratuity are all calculated, so they can avoid the awkward who-pays-for-what moments that often arise at group dinners with friends, Lu says. People still each pay for what they drank, but Grubwithus is working on incorporating drink purchases into its app for the future, Lu says.
