Nonprofits, Small Business & Startups, and Technology

FoodCircles app receives microloan funding

October 26, 2012
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FoodCircles receives microloan funding
FoodCircles is a free mobile app developed by University of Michigan grad Jonathan Kumar. The app allows restaurant customers to help nonprofits fund meals for others. Courtesy Jonathan Kumar

Jonathan Kumar had a vision for tasty charity.

The recent University of Michigan grad wanted to create a business that blended impoverished children’s mouth-watering need for food with a philanthropic entrepreneurship supporting the food industry.

“Can we leverage our purchasing intentions to do something powerful?” Kumar asked. “People eat out a billion times a week, but there are still a billion hungry. Can we connect those two stories?”

With a smartphone and funding from the Michigan Microloan Fund Program, Kumar believes he has found an answer: FoodCircles.

It’s a free mobile app created by Kumar and others that allows users to “buy one, feed one.” When users select to dine at a restaurant serviced by the app, it funds meals with Kids’ Food Basket and World Vision.

The customers pay the restaurants that pay for advertising with FoodCircles, which pays for the nonprofit meals, making the original customers happy, Kumar said.

It also has a-dollar-a-meal model, where users can purchase an appetizer or dessert through the app and 100 percent of the purchase will go toward a meal.

It’s a beneficial situation for everyone involved, Kumar said, because the mentality quickly leaps from “I want a deal,” to “I want my purchase intention to help someone.”

“It falls right between philanthropy and adding new customers, making new relationships in a healthier way than just giving someone a percentage off,” he said. “Socially-minded customer acquisition is a lot better than acquiring a bunch of deal hunters.”

With a staff of just six, including himself, Kumar said in its first year, FoodCircles has paid for more than 1,000 meals.

He said he is deeply appreciative of West Michigan’s support and the capital loans from the Michigan Microloan Fund Program, which recently sent FoodCircles and six other Michigan companies a total of more than $232,000.

Of that amount, Kumar said, FoodCircles was given $25,000, with a milestone goal of adding another $25,000.

“This is a great place to experiment, and that’s what the microloan is for,” he said.

The capital comes from the 21st Century Job Fund and is loaned to tech companies in the state that are not able to get equity yet, said Skipp Simms, manager of the Michigan Microloan Fund Program and senior vice president of Ann Arbor SPARK.

“We can loan it to them for a short period, a maximum of two years,” he said. “We give to those who confirm in our mind that there is a market here, a need, and what they’re doing meets the need. We expect high and rapid growth.”

Kevin McCurren, executive director of Grand Valley State University’s Center of Entrepreneurship and Innovation, said the loans are given to individuals who can prove they are creating potential initiative through technology.

The idea presented must have the potential to grow a revenue base of $10 million in five years, he said, and the center is betting on Kumar and his FoodCircles.

“Jonathan has not waivered,” McCurren said. “It’s been a good two years he’s been working on this. That perseverance is an important quality.”

To connect or book a meal with FoodCircles, visit http://foodcircles.net/.

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