Sarah Morgenstern
Principal, Investments

Why We Invested: Propel

April 26, 2017

The importance of customer-centricity is axiomatic in the tech industry. Frequently, however, we forget to ask a fundamental question: which customers are we talking about? Too often, the answer excludes low-income households. This problem is particularly pronounced in the financial services realm, where US households living at or below the poverty line have proven difficult for new ventures to serve effectively.

Propel, a software development firm founded by former Facebook and Google engineers, is setting out to change that fact by harnessing the Silicon Valley toolkit to make America’s safety-net more user-friendly.

Propel’s starting point is the Supplemental Nutrition Assistance Program (SNAP), the federally funded, state-administered aid program that provides food purchasing assistance to more than 44 million people across the country. The strategy? Tackle the cash flow challenges of SNAP beneficiaries with the customer-obsessed mindset epitomized by the likes of Steve Jobs and Jeff Bezos.

To create relevant and intuitive solutions for SNAP recipients, Propel anchors its design process in keenly observed user insights.

Take, for example, the daily task of checking account balances. SNAP disburses $66 billion in nutrition assistance annually, distributed via Electronic Benefit Transfer (EBT) cards. Currently, most EBT cardholders keep track of their monthly SNAP balance by calling a phone hotline or saving their old grocery receipts — a cumbersome and time-intensive activity.

Propel’s product, a free mobile app called Fresh EBT, allows EBT users to check their balances on their mobile phones, as well as to plan their shopping trips and connect with other community resources. Using Fresh EBT saves users significant time and stress, and makes it easier to budget and save over the course of the month.

The customer response has been overwhelming. Over 250,000 people across the country now use Fresh EBT at least once per week. As one user commented, the app “makes my difficult life a little easier.”

The impact of the Fresh EBT platform is magnified as Propel’s user base grows. Fresh EBT’s customers already spend over $1 billion each year on groceries. Leveraging this aggregate purchasing power, Fresh EBT represents a compelling mobile channel that grocery retailers and other brands can use to deliver savings for Propel users via customized deals and loyalty rewards. This monetization model achieves a true “win-win,” as SNAP recipients are able to stretch their benefits further free-of-charge while also gaining access to Propel’s partners’ values-aligned, high-quality products and services.

Propel is paving new ground by proving that customer-centricity for overlooked consumer segments is a competitive differentiator, and that trust-based digital tools can assist low-income households at scale. At Omidyar Network, we are inspired by Propel’s dogged commitment to generating value for its users, and are proud to support the company’s path-breaking work to ensure all Americans benefit from this exciting era of mobile-enabled financial innovation.

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Discussion
Juby George-Vaze CEO & Chief Innovation Officer at Globex Health

This is great and targeting an often forgotten group that involves many mother and children, just having real time information, such basic step that seems to be forgotten is great. I hope you will add more tools like free education options (using coupons for udemy or khan academy, healthcare/nutrition tools/apps) because you have a doorway to a population that can use that type of help in return will have x10 return with better health and upwardly mobile next generation.

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