Smartphone App Brings Innovation to Takeout

Snapfinger is owned by Atlanta-based Kudzu Interactive, whose combination Internet/mobile business model piqued the interest of investors when the idea was first presented in 2006, including Norwest Venture Partners. Kudzu has been able to raise $7 million to expand the Snapfinger service to new cities across the nation and build partnerships with major restaurant franchises such as Outback Steakhouse, California Pizza Kitchen, and Subway. The ordering service plans to create relationships with more casual dining establishments as well as with independent restaurants, starting in California, in the coming year. It has proven to be most popular in Orlando, Fla., Chicago, San Francisco, Portland, Ore., Houston, and Winnipeg, Manitoba.

The Snapfinger service is simple: Users place orders to their favorite local restaurants and pick up their meals on the way home. The service can be accessed from the Web, a mobile phone, or via a designated toll-free number. Kudzu developed the technology used to run the site and the app -- a Web-based remote ordering platform that has become the industry standard for food delivery and takeout services online. Snapfinger connects directly to each restaurant's cash register or computer and syncs up with prices and specials for the day. The ability to see menus in real time helps account for the differences in prices, specials, and hours that often occur with chain restaurants spread across different geographical regions.

Snapfinger also represents the next step in innovation and profitability for app developers. Restaurant-ordering apps open up possibilities for a whole new category of apps that will be driven by mobile commerce, a niche that Kudzu's success has proven can very profitable for business owners. Kudzu's revenue jumped fivefold in 2009, according to Jim Garrett, the company's founder and CEO.

Joshua Goldman, a general partner at Norwest and Kudzu board member, notes that many mobile users and technologists see mobile companies as little more than app developers making cheap, 99-cent-a-pop products. Transaction-based apps like Snapfinger keep them interactive and ongoing, as users conduct transactions many times per week. Restaurant-related mobile apps like Yelp and iWant have been mostly limited to information about specific restaurants, but few have gone beyond the social aspect to actually allow foodies to interact directly with restaurants. SeamlessWeb and Delivery.com are among Snapfinger's competitors in the online-ordering

Mobile industry analysts see Kudzu's e-commerce app model as an improvement on the fast-food restaurant industry -- not just technological innovation. People ordering through the Snapfinger service spend as much as 25 percent more than when ordering at the restaurant. Garrett believes this is because of the opportunity for non-threatening upselling provided by the Internet -- like adding extras to a hamburger or a salad -- that not all servers might be able to accomplish in person.

Kudzu Interactive launched in 2004 and was designed to help restaurants build websites for takeout, then expanded to help them create their own mobile apps. Snapfinger is the company's flagship consumer app, rolled out in 2009. The mobile app is available iPhone, Android, Palm. An app for BlackBerry is expected to launch by the end of June.