Sitting at a Lakers game one day in 2011, early 20-somethings Kevin Anderson, Jason Pratts, and Max Roper had a dilemma: They wanted snacks and beer but didn't want to miss part of the game to go get them. Sports arenas, they concluded, needed a delivery app like GrubHub or Seamless that would bring items right to fans' seats.

They didn't waste any time. Roper, who'd dropped out of college to take a job with Apple, had some engineering chops. Together, the trio built a platform, named it Appetize, and started requesting meetings with every venue they could find. The idea was simple. Fans could order food, drinks, or merchandise through the app, and an arena employee would bring it to their seats. 

The co-founders had some success. They hustled their Los Angeles-based operation into San Diego Sports Arena, the Grand Ole Opry in Nashville, and Philadelphia's Wells Fargo Center. By 2014, they had signed a deal with Madison Square Garden.

While the entrepreneurs were building out their product, they kept noticing something. Connecting the app to the venues' payment systems was far from seamless. "The more venues we got into," Anderson says, "the more we realized they were either on old-school cash registers or these archaic Windows-based systems."

One day, the startup was in talks with Texas-based Spectrum Concessions, which handles food services at music festivals Bonnaroo and Governors Ball and more than a dozen PGA Tour events. The company told the co-founders that what it really craved was a new point-of-sale system. It needed to be wireless and portable, but offer more back-end features than a platform like Square, which is geared more toward small businesses. 

"That," Anderson says, "was a light-bulb moment." Within three weeks, Appetize built a proprietary POS system that required only an internet connection and a tablet or smartphone. Soon, they added the abilities to operate both online and offline and to store data in the cloud.

As of December 2018, Appetize is in more than 55 percent of all major league sports venues in the U.S., from Yankee Stadium and Green Bay's Lambeau Field to Philips Arena (home of the NBA's Atlanta Hawks) and AT&T Center (home of the NBA's San Antonio Spurs). The startup's clients include concessions and events companies like Aramark and Live Nation. In many cases, Appetize is replacing legacy companies like Oracle and NCR, a 130-year-old company whose name once stood for National Cash Register.

The system's interface uses an algorithm to suggest common orders and amounts of change, saving cashiers precious seconds on each transaction. The software tracks inventory, advising when and where to rotate out food for maximum freshness. It also creates a heat map that indicates how well items are selling in specific locations and where stock is running low.

Potential clients have been impressed. This year, the company says it has won 75 percent of the request-for-proposals for which it has applied, many of which have had five or six candidates. Its new customers have included zoos, theme parks, music festivals, and chains like Tropical Smoothie Cafe, which installed the system in all 700 of its locations.

MetLife Stadium, home of the NFL's New York Jets and Giants, switched to the platform before the 2018 season. "Moving to a cloud-based provider allowed us greater flexibility," says Ron VanDeVeen, the venue's president and CEO, adding that transaction times have been faster since the stadium switched.

Still, Appetize isn't for every business. The company, which charges based on the number of tablets or terminals a venue needs to lease and the number of days it's in operation each year, offers data-crunching capabilities that mom-and-pop shops won't need. It's priced accordingly: Each device costs between $300 and $2,000 per year, with companies that need fewer devices falling at the high end of that range, so sign-up-and-go platforms like Square and Clover generally make more sense for small businesses.

Anderson won't reveal revenue numbers except to say that the company will grow by 250 percent year over year in 2018. In August, it announced a $25 million investment from 32 Equity, the NFL's funding arm, which put its total funding over $50 million.

With new offices in Buffalo and Atlanta, the company has grown to nearly 300 employees--a far cry from its early days when it was taking on big clients and hiding the fact that it was still a team of three. The co-founders landed their earliest deals, including one with the Philadelphia Eagles' Lincoln Financial Field, while still headquartered in the apartment they shared. 

"From a company standpoint," Anderson says, "we were definitely posturing like we were much larger than we actually were."

Today, the original food-delivery service still operates in some arenas, including in the premium seats at the Garden, but it accounts for only a single-digit percentage of the company's overall revenue.

"A few years ago," Anderson says, "we were eating Top Ramen and drinking Red Bulls in our apartment, just trying to get to the next week. So we still look around and pinch ourselves."

Published on: Dec 5, 2018