Payments startup Forage lands $22M to make online grocery accessible to 42 million Americans on government food assistance program (SNAP)

The United States is the richest country in the world. Yet, one in eight Americans receives government assistance to buy their weekly groceries, which translates to 42 million Americans who receive food assistance from the government Supplemental Nutrition Assistance Program, also known as SNAP. However, SNAP recipients make their food purchases through brick-and-mortar grocery stores. Until now.

Enter Forage, a USDA-approved third-party payment processor (TPP) and a PIN provider that authenticates and processes EBT transactions. Forage enables SNAP recipients to use their benefits to purchase groceries online. Forage enables grocers to accept SNAP EBT (previously known as “food stamps”).

Today, Forage announced it has raised a $22M Series A funding round to accelerate online grocery access for America’s 42 million SNAP EBT recipients. The round was led by fintech specialist firm Nyca with participation from PayPal Ventures, EO Ventures, and prominent angels including Apoorva Mehta, founder of Instacart. Forage will use the funding proceeds for product development and accelerate hiring to meet the high demand for the company’s solutions.

Founded in 2020, Forage makes it easier for grocers to accept SNAP EBT (food stamps) payments online, giving merchants access to a $200B market, and enabling the 42M Americans receiving benefits to spend them online. Forage also guides merchants through the USDA application process and tech integration for merchants, taking most of the burden off retailers.

Forage’s founders created the company to democratize access to government benefits and help underserved Americans more easily access their benefits online. Forage works with multiple grocers and platforms such as Shopify and Flashfood to accept SNAP EBT payments online.

Commenting on the funding, Ofek Lavian, co-founder and CEO of Forage, said, “This capital will help accelerate Forage’s mission to democratize access to government benefits. We’re proud of the technology we’ve built and are excited to expand the acceptance of SNAP EBT payments online for low-income Americans.”

One in eight Americans receive government assistance to buy groceries. While more than 250,000 brick & mortar locations accept SNAP benefits via EBT in-store, only a fraction have been approved for online EBT. Many SNAP recipients are homebound, lack transportation, or live in a food desert without easy access to grocery stores; many others want to avoid in-person shopping due to concerns about COVID. While many Americans were able to shift to online grocery shopping during the pandemic, SNAP recipients were not afforded this safety and convenience because they are effectively unable to use their benefits online.

Forage has an in-house team of EBT and payments experts, including former Instacart and Freshop employees. In addition to its stand-alone EBT solution, Forage developed and recently launched the first Shopify app that offers online EBT payment processing to Shopify’s ecosystem of merchants. The company is already working with dozens of well-known grocers to help them accelerate their path to accepting SNAP EBT online.

“Forage is tackling a critical problem for consumers and merchants as more groceries are bought online,” said Tom Brown, Partner at Nyca Partners. “Nyca is excited to back the incredible team on their mission of making it as easy for eligible merchants to accept EBT as any other form of payment.”

Forage provides merchants with support through every step of the USDA approval process, from preparing the required documentation, through system engineering and testing, to deployment, making it as easy as possible for new merchants to accept EBT online, with the goal of opening the online EBT space to more merchants and ultimately more SNAP recipients.