Cafeteria raises $3M so teens can tell Nike to get Adam Sandler as a brand ambassador

Brands often rely on scraping the web and monitoring social media to understand what customers are saying about them and get insights for product development. Cafeteria is a startup that wants to connect brands to their most opinionated customers: teens.

The startup is launching an iOS app today to onboard teens and connect them with brands they are interested in to provide feedback about their strategy and product development. In return, teens can earn money for their feedback. Before today’s launch, the startup tested the app under the beta program for three months, onboarding teens across 60 U.S. cities.

Cafeteria is headed CEO Rishi Malhotra, who was co-founder of India-based music streaming service Saavn (now JioSaavn) — which was acquired by Mukesh Ambani’s Reliance Jio in 2019 — and ex-CEO of Luminary Podcasts. The founding team also includes chief business officer Mark Silverstein, who was Chief Content officer of Luminary, and chief design officer Leeann Sheely, who was VP of Design at Luminary and JioSaavn both.

Rishi Malhotra Image Credits: Chris Callaway

The company has raised $3 million, led by Collaborative Fund and Imaginary Ventures, with additional participation by Bertelsmann and veteran music industry exec Guy Oseary, who has worked with Madonna and Red Hot Chili Peppers.

“Cafeteria operates in the consumer insights and market research industry, uniquely focusing on real-time, authentic feedback from teenagers. Distinguished by its zero-party data collection, customizable analytics, and strong leadership under CEO Rishi Malhotra, , it provides brands with actionable and timely insights tailored to Generation Teen,” Andrew Montgomery, Partner at Collaborative Fund, told TechCrunch over email.

Montgomery added that the Cafeteria has a great product market fit in the consumer insights market because it delivers authentic and actionable insights for brands directly from teenagers.

How does the app work?

Once the teen joins the app, they will select the brands they are interested in. Cafteria will then invite them to participate in surveys called tables. Teens can provide answers to question in a table through a text or voice.

Teens will get paid anywhere between $5 to $20 for their insights, and they can transfer their balance to Venmo, PayPal, Cash App, and Bank account through Cafeteria’s integration with Dots, an API for payouts. Users will have to have minimum of $10 in their Cafeteria wallet to transfer the balance.

The company said on average, these table sessions last five minutes. Cafeteria mentioned that teens give insights ranging from which celebrity Nike should work with — apparently, Adam Sandler is as popular as Taylor Swift and Sabrina Carpenter — and how they would spend $100 at a mall.

The cafeteria currently has thousands of users who get onto the app through either referral or word of mouth. All users are put on a waitlist before being accepted.

During onboarding, teens go through a lifestyle table, where they are asked 20-25 questions about retail, shoes, food, music, first car, banking, and more. Post that they can select eight brands that they love.

The company is also limiting the number of surveys or tables teens get per month to three to five. Malhotra believes that this activity for teens is more rewarding than scrolling social media, but the company doesn’t want them to become daily or weekly active users.

Privacy and safety

Cafeteria noted that all user’s identity markets, such as names and emails, are hidden from the companies. Brands can only see gender, age, and zip code.

For users under 18, the company has an optional feature to include parents’ emails while singing up for the service, but it’s not enforced.

The startup has a moderation policy consisting of humans and AI. It monitors comments for disinformation and harmful content and flags the users if they find such input.

In its privacy policy, the startup notes that the services are not meant to be used by children under 14 and if the company becomes aware of any underage user, they delete the data.

How do Brands benefit from it?

Cafeteria collates insights from teens and puts them into a dashboard called albums by curating them by categories. These albums have insights with titles like “Edikted, Zara, Adidas and Skims are breaking through as brands that teen girls want to try next” and “On average, teens say $314 is what they would pay to see their favorite artist.”

Image Credits: Cafeteria

The startup has a basic $ 5,000-a-month plan to access lifestyle album insights and also look at cohort competitor insights. $ 8,000 a month lets them create two surveys or tables with at least eight questions across a minimum of eight users. For additional surveys, brands need to pay $2,500 a month.

Malhotra said that Cafeteria has onboarded top brands for its initial phase, but didn’t name any of them. He mentioned that the company has completed over 2,200 tables with over 50,000 insights.

The company believes that its core strength is in collecting unstructured data and creating insights out of it.

“We are building large language models that put the insight data in context. We are training different models that help us make sense of a lot of data,” Malhotra said.

Cafeteria believes that in the future, it can make the brand engage better with teens and also offer a store credit or a percentage discount.

The company is also building out the capacity for brands to run prompts against insight albums and search for different metrics.