Austin startup Favor raises $2 million for growth

Sep 5, 2014
Austin American Statesman

Austin startup Favor has raised $2 million to expand its mobile service that delivers orders from local restaurants and stores

Using Favor’s mobile application, users place orders on a smartphone and a courier delivers it to their door within 35 minutes. The cost ranges from $5 per trip for orders under $50 to $10 for orders over $100

The three-year-old company currently operates in Austin and Boston and is planning additional locations, which have not yet been announced

“We’re focused on any major city that has a strong concentration of college students,” said Ben Doherty, Favor co-founder and CEO. “In Austin we first got off the ground with University of Texas students and then spread to the rest of the city from there. Now we’re not really dependent on students anymore.”

Favor has expanded its Austin-area coverage a number of times, including recently adding service in Rollingwood and West Lake Hills

Investors in the deal included Austin-based Silverton Partners and Silicon Valley investor Tim Draper. The company previously raised $42,500 from backers including friends and family

Since launching the service in 2013, Favor has completed $2.7 million in transactions, and the number of deliveries in August were double that of March, Doherty said

Favor generates revenue from the delivery fee and from restaurants that pay it for leads generated through the Favor app

More than 53,000 customers have signed up for the service. Users rate the company’s delivery people, who must maintain an average customer rating of 4.8 stars out of 5. Drivers are guaranteed to make $9 an hour, and the average wage is $14 an hour

The company founded by Doherty and Zachary Maurais, who participated in business incubators in California before relocating to Austin in 2013 to join the Austin Technology Incubator

The 16-person company now has offices in the Brykerwoods neighborhood in North Central Austin

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