Forage: The Trillion Dollar Opportunity in Restricted Payments | Ofek Lavian
The Peel with Turner Novak
Turner Novak
4.6 • 11 Ratings
🗓️ 3 April 2025
⏱️ 73 minutes
🧾️ Download transcript
Summary
Ofek Lavian is the Co-founder and CEO of Forage, the mission driven payments company.
This is a special episode, because I’m an investor in Forage, and Ofek shares everything he’s learned building the company. We go deep on food stamps, also known as EBT or SNAP, the government program that provides over $200 billion dollars per year in benefits that help 42 million low income Americans buy food.
Our conversation gets into lessons from Ofek’s time leading payments teams at Uber and Instacart, building Instacart’s EBT program up to 40 employees and 10% of its total revenue, and why Ofek is so passionate about helping low income Americans.
We get into the history of food stamps, market dynamics that led to low online adoption, the days Ofek thought Forage might not make it all the way to now working with the biggest players in online grocery, like Uber and DoorDash, and the long-term opportunity Forage has to build the rails the government uses to distribute trillions of dollars of restricted consumer benefits.
Thanks to Numeral for supporting this episode, the end-to-end platform for sales tax and compliance. Try it here: https://bit.ly/NumeralThePeel
Timestamps:
(4:53) Forage: Helping 42m Americans buy food
(5:24) History of food stamps & EBT
(9:26) Growing up as an immigrant family with low food access
(11:39) 90% of EBT recipients are elderly, disabled, or working parents
(12:39) How Forage sells revenue to its customers
(14:15) Building Instacart’s EBT program during COVID
(18:25) Why no one built an EBT payments product
(22:13) Joining Forage as a Co-founder
(25:01) Why government payments are so hard
(30:25) Growing 15x in six months
(33:52) Underdiscussed mental health challenges of startups
(37:06) How the political environment impacts EBT
(43:20) Why Forage charges more than competitors
(45:58) Seasonality in EBT spend
(46:59) Why early investors passed on Forage
(48:10) The trillion dollar opportunity in restricted payments
(50:56) “ There's no single idea that has destroyed more business value on planet Earth than the idea that micromanagement is bad.”
(54:45) Why Forage doesn’t care about job titles
(58:51) Lessons backpacking across 28 countries after college
(1:02:09) How to travel on a budget
(1:04:24) Importance of health
(1:06:15) Saving a friends life on Mount Everest
Referenced
Forage: https://www.joinforage.com/
Ofek’s viral tweet: https://x.com/OfekLavian/status/1766950034581700697
Follow Ofek
Twitter: https://x.com/OfekLavian
LinkedIn: https://www.linkedin.com/in/ofeklavian/
Follow Turner
Twitter: https://twitter.com/TurnerNovak
LinkedIn: https://www.linkedin.com/in/turnernovak
Subscribe to my newsletter to get every episode + the transcript in your inbox every week: https://www.thespl.it/
Transcript
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| 0:00.0 | I've bet my career on the question you just asked, |
| 0:01.8 | like, why didn't Stripe build this and why didn't all the best, |
| 0:05.4 | the best payments companies in the world? |
| 0:06.6 | Why did, how could they have missed such a massive opportunity? |
| 0:09.5 | EBTs funded hundreds of billions of dollars a year in the largest sector of retail, |
| 0:15.8 | which is grocery. And I think it fundamentally comes down to two things. |
| 0:20.0 | The first is that businesses like Stripe and Braintree and Audien have tens of millions of sellers around the world selling anything, anywhere. |
| 0:30.6 | And if you really look at their product suite, it's built for horizontals. |
| 0:34.6 | It's not built for verticals. |
| 0:36.6 | So things like Stripe Radar prevents fraud for any seller anywhere in the world or issuing or capital or billing. |
| 0:45.1 | And if you think about EBT, it's it's geospecific. So it's a US only product. And it's also |
| 0:51.3 | industry specific. So it's only for really grocery and retail. |
| 0:55.2 | And so I think just a very small percentage of their total seller base would benefit from |
| 1:02.4 | that type of pay method. |
| 1:03.8 | And the second thing is just the amount of compliance and work required to enable |
| 1:07.6 | EBT is massive. |
| 1:08.6 | I mean, it took us years before we processed our first dollar in EBT. |
| 1:13.0 | I mean, oh, yeah, it is incredibly difficult to get approval from the USDA for this product. |
| 1:19.7 | And if it were easy, they all would have done it. So you've got all their biggest customers, |
| 1:23.4 | Instacart, Uber, DoorDash, are begging them, saying, strike, please go build this, |
| 1:26.5 | right, please go build this. And eventually after screaming into the void for so long, and I couldn't get FISAV to improve their product, we had a ton of reliability issues. It became increasingly clear that this needed to exist in the world. And if the best payments companies weren't going to do it, then I was. Welcome to the PEO. |
| 1:46.6 | I'm your host, Turner Novak and founder of Banana Capital. |
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