C is for Cash: Cookie Deliverer Tiff’s Treats Good Enough for $25M

Xconomy Texas — 

Austin—The product is warm cookies, and the service is delivering those made-to-order sweets within 90 minutes. That can only happen with customized proprietary software, says Tiff’s Treats co-founder Leon Chen.

“The technology is the brains behind each of our locations,” says Chen, who founded the cookie maker and delivery company with his now wife, Tiffany Taylor Chen, in 1999. “The system schedules the deliveries, the customer database stores information so we can have real-time, warm cookie delivery.”

To continue to develop software the company first created in 2004, and to make hires to support that, Tiff’s Treats announced Wednesday that it has raised $25 million in a Series D round of funding from Morgan Stanley Expansion Capital, the firm’s private equity group focused on late-stage investments in tech, healthcare, consumer, and other sectors. Previously, the company raised $11 million in November 2016 and $14 million in August 2015 in Series C and C-1 rounds, and has received $50 million total in investment.

Tiff’s Treats founders Leon and Tiffany Taylor Chen.

The company began when the Chens were friends at the University of Texas at Austin and baked cookies to help fellow students get through exams. Tiff’s Treats now has 34 stores in Texas and Georgia, with more than 700 employees, and those stores have made more than 80 million cookies since its inception, the company says.

Unlike other food maker and delivery companies— pizza chains, for example—which have about 40 percent of orders come from in-store visits, Chen says only 20 percent of Tiff’s Treats orders come from their stores. Eighty percent of their business is through online ordering.

Another distinctive feature of Tiff’s Treats is that people are equally motivated to order for themselves as they are for others as gifts. “Nobody says, ‘Anyone want to go in on an Edible Arrangements order with me?’ Chen says. “They don’t send Domino’s pizza as a client gift.”

To manage its customer demand, the company has an in-house team of seven software developers, Chen says. “It’s the key to everything.”

Most recently, the company launched its mobile app, which Chen says allows customers to track their cookie delivery much like you watch a ride-hailing driver’s progress on a map to pick you up. “For privacy issues, we don’t have the ability to track gifts like this,” he adds.