Tap.in2 seeks more orders in expanding market for stadium in-seat food delivery apps

Screen shot of Tap.in2's Cavs Eats app. (Click on any photo for larger image)

Screen shot of Tap.in2’s Cavs Eats app. (Click on any photo for larger image)

After a successful beta-type trial with the Cleveland Cavaliers this past season, startup Tap.in2 is seeking new customers for its in-seat food and beverage delivery app, which lets sports fans order and receive concessions without having to stand in lines.

Unlike the well-publicized debut of stadium-wide in-seat delivery services offered last year at the San Francisco 49ers’ new Levi’s Stadium, the Tap.in2 program at the Cavs’ Quicken Loans Arena flew a bit under the radar and was only offered during the last 22 home games, including the Cavaliers’ home appearances in the NBA Finals. But according to Mike Jacobs, president and co-founder of the Cleveland-based Tap.in2, there are plenty of professional sports franchises interested in adding in-seat concessions delivery to their arenas, and Jacobs is confident Tap.in2 will soon announce some new customers beyond the Cavaliers and beyond the NBA.

Though he didn’t have any names to officially announce, Jacobs held a recent phone interview with MSR while at an airport en route to meeting with a potential (unnamed) new customer. With somewhere north of $575,000 in reported funding, the six full-time employees and six part-timers at Tap.in2 will be competing mainly with Levi’s Stadium app developer VenueNext and its recent $9 million funding round in the new but rapidly expanding market for stadium in-seat food delivery apps. VenueNext, which said it will soon announce as many as 30 new customers, is rumored to be bringing its food-delivery expertise to other NFL stadiums this fall, but so far MSR has been unable to confirm any official deals.

Avoiding the lines

If there’s any app whose potential value needs no explaining to sports fans it’s in-seat delivery, which targets one of the biggest pain points of attending live events: Having to wait in line for concessions. In the recent past many arenas have added delivery services for suites and premium seating areas, usually facilitated by ushers with handheld wireless devices for ordering. But in most venues, the balance of fans still have to queue up for food and beverages, usually missing some game action while doing so. But now, with most big arenas having high-capacity Wi-Fi and DAS networks, the idea is to let fans use their smartphones to order concessions, allowing them to enjoy more of what they came to the stadium for in the first place.

VenueNext screen shot of food ordering feature on app.

VenueNext screen shot of food ordering feature on app.

Tap.in2’s Jacobs said one such story from his game-attending past — a New York Yankees game back in 1993 — planted one seed for the idea that eventually became Tap.in2’s app. At that long ago game Jacobs remembers his father missing three innings of some crucial late-season action merely to obtain a soft pretzel and some hot chocolate. A couple years ago while at college in Berkeley, Jacobs and his roommate Jordan Syms took the idea of eliminating concession line time and ran with it, building the startup that would become Tap.in2, a career path that led them to Cleveland.

As a portfolio company at the startup accelerator called Bizdom started by Cavaliers owner Dan Gilbert, Syms and Jacob led their team to deliver an app that would let food and beverages be delivered to Cavs fans — starting very very slowly but then building over time.

“For the first game the service was turned on, we had two seats live,” said Jacobs. The pair of lucky long-time Cavs season ticket holders, he said, racked up seven orders during the inaugural game, providing “good feedback.” After that the service was expanded to cover a single section, then two sections, eventually scaling up to support the entire lower bowl at the 20,562-seat Quicken Loans Arena. According to Jacobs by the end of the season the service was facilitating “hundreds” of orders per game and was already returning some interesting stats, like 80 percent of the orders being beverages and an average spend per order of $32. In addition to food and drinks, the Tap.in2 app also supports the sale of in-game “experiences,” like being able to shoot baskets on the court after the game.

Integration with existing app and services the key

Jacobs said the Tap.in2 technology is designed to be easily integrated with an existing team app, like the NeuLion-built app used by Cavs fans. He also credited food and beverage provider Aramark for having incredibly efficient operations to allow for smooth delivery of orders, a human engineering problem that can sometimes go haywire when scaled up unexpectedly.

Front screen of Cavs Eats app.

Front screen of Cavs Eats app.

If there is any sticking point to the food and beverage delivery services it’s the human engineering side of the equation, mainly guessing how many “runners” will be needed to ensure prompt delivery of orders. Our guess is that unlike Levi’s Stadium, which offers the delivery service to every fan in every seat for NFL games, many stadiums will opt to start with delivery services to smaller sections of fans, like premium seating, until operational issues are fully worked out. (Most will probably have service to more than two seats, however.)

On the technical side, delivery apps need to integrate with back-of-the-house point of sale systems, and must be easy enough for fans to understand and stable enough for fans to trust with sensitive information like credit card numbers. But from industry interviews and reporting, it’s our guess that we will soon see a slew of food-delivery announcements at big pro and college venues this fall, from both VenueNext and possibly some from Tap.in2 as well. (Bypass Mobile, which once offered in-seat delivery via a service called Bypass Lane, appears to have completely switched to providing back-of-the-house POS systems for stadiums and other large public venues.) The trick for both the bigger VenueNext and Tap.in2 will be how well and how quickly they can integrate their delivery functionality with existing apps, something that is never an exact science.

Investors Pump $1.75 million Into Bypass Lane’s Mobile “Beer-Me” Application

After landing the University of Texas Longhorns, Stanford Cardinal and Philadelphia Eagles in August, Bypass Lane is attempting to establish itself as the leading developer of mobile electronic commerce applications used at live sporting events.

The Austin-based company announced today that it has raised $1.75 million in new venture capital with funds earmarked primarily for building a sales organization. Investors include former Minnesota Vikings owner Red McCombs, Wasserman Media Group chairman and CEO Casey Wasserman and business managers for bicyclist Lance Armstrong. The nine-person company selected the investors on the basis of their connections to the sporting world, and expects to be able to draw upon their expertise to better penetrate the live sporting market.

The Bypass Lane App

Available through App Store, Android Market and BlackBerry App World, Bypass Lane allows consumers to download its application during a live sporting event, store payment information, and order food, drinks and merchandise that is either delivered to their seat, or provided through a special window at the concession stand. There is no surcharge for the service. Teams license the Bypass Lane platform, and pay the company on a per-transaction basis.Fans typically spend 35 percent to 50 percent more using a Bypass Lane application than they do while waiting in line, which is one of the primary benefits sports teams get from a Bypass Lane license.

The concession market at live events are between $8 billion to $10 billion in the United States, according to Reuters.

Company president’s quote: Boom Goes the Dynamite!

In an interview with MobileSportsReport, Bypass Lane president Lloyd was on the money in explaining his company’s value proposition:

“It is a foregone conclusion in the industry that sports fans are going to use their mobile devices in the live-event venue, but how to monetize that is something all sports teams are wrestling with,” said Lloyd. “We offer something that allows teams to generate a return on investment in their first year. (Sports teams) can increase their average transaction size, capture sales that are lost to line deterrence, and a last-call feature allows teams to move excess inventory.”

Bypass Takes No Shortcuts to Momentum

Debuting in 2010, Bypass Lane found it slow going at the outset, but is beginning to establish itself as a category leader. Bypass Lane broke through during the 2011-2012 college football and National Football League season with the addition of the Longhorns, Cardinal and Eagles concessions. Other clients include the Texas Rangers, Carolina Hurricanes, Phoenix Coyotes and Minnesota Wild. To date, Bypass Lane is available in about 40 U.S. venues, and it should come as no surprise that Mark Cuban, one of the industry’s most tech-savvy owners, has it through a Bypass Lane agreement with American Airlines Center, home of the Dallas Mavericks and Dallas Stars.

“We spent 2010 solidifying fulfillment, and in 2011 we’ve been adding over two venues a month,” said Lloyd. “We expect to continue that pace for the foreseeable future.”

The other Lloyd: Not an NFL Wideout

Bypass Lane’s Lloyd has experience create start-ups. He launched Off-Campus Solutions in 2002, and sold the company to offshore investors a few years later. Lloyd is not the NFL wide receiver of the same name.