In addition to struggling to make ends meet every day, low-income Americans who receive food stamps face another challenge: determining just how much money they have left for the month. That’s the problem social entrepreneur Jimmy Chen is trying to solve with his three-year-old startup Propel.
The free app gives the 45 million recipients of food stamps a way to check their balances from their smartphone. Plus they can browse deals at nearby stores, see which places accept food stamps and figure out if they have enough to buy their chosen items.
“Our software fights poverty through technology,” says Chen, who is CEO of the New York City-based company.
The company also recently raised $4 million in seed funding from Andreessen Horowitz and Omidyar Network, among others.
The app is called Fresh EBT—EBT is the acronym for the Electronic Benefits Transfer Card, the mechanism through which recipients get access to benefits from the Supplemental Nutrition Assistance Program, the food stamp program’s official name. Usually, to keep track of their balances, recipients have to call a hotline or total up their grocery receipts.
Chen, a former Facebook product manager, started out looking for a way to streamline the food stamp enrollment process. But one day, while doing research at a grocery store, he asked a shopper to tell him how she used the card. First thing, she called a phone number, then plugged in her card number from memory. How did she know that by heart? “I call this number every day so I know how much food I can buy for my kids,” she explained. It gave him the idea to streamline that part of the process.
When you open up the app, you see not just your balance and transaction history, but also a map showing stores and farmers markets that accept food stamps, as well as those offering coupons or weekly specials.
In fact, Chen’s immediate customers are stores that recipients patronize. Revenues also come from advertising. For now, six chains are participating in the program, which was launched in 2016. But for now the emphasis is on getting app users. “Our business model expresses the overall purchasing power of low-income shoppers across the country,” he says. “It’s more powerful if we have more people on the platform.”
About 250,000 people throughout the country use the app each week, according to Chen, and 700,000 have downloaded it. That leaves a lot of room to grow, because, according to Chen, about 70% of low-income consumers have smartphones and, in fact, use their devices as their primary means for connecting to the web. Ultimately, Chen wants to provide access to a variety of other services, in addition to food stamps.
There are other social enterprise startups out there also using tech to improve the lives of minimum wage and low-income workers. For example, Even offers an app and service which helps low-wage workers who don’t have set hours make a steady income. If a member’s paycheck is lower than that person’s stated Even “salary”, the company boosts their check with a deposit for the difference. The next time they get a check higher than their salary, the company makes a withdrawal to pay itself back.
What might potential cuts to the federal SNAP program mean for Propel? “There’s a lot of uncertainty about benefits,” says Chen. “But we believe we can provide stability at a time of change,”