LineLeap, backed by Y Combinator, lets people pay to skip lines at bars. Using the startup’s mobile apps, users can shell out for front-of-the-line passes to venues that LineLeap’s partnered with.
“As college students, we noticed a common problem that many people before us have endured,” Max Schauff, LineLeap’s co-founder and CMO, said. “Our favorite college bars had really long lines. The issue was that bars didn’t have an open and transparent way of allowing customers to skip the line on their most special nights. And they were leaving a lot of revenue on the table because of it.”
Love the concept or hate it, VCs seem to like where LineLeap’s taking it. Y Combinator last month led a $10 million round in the company, with participation from The Chainsmokers’ Alex Pall and others. The round, which brought LineLeap’s total raised to $25 million, valued the startup at an eye-popping $100 million.
Driving from college town to college town
Schauff met LineLeap’s second co-founder, Patrick Skelly, while working at EnvoyNow, an on-demand food delivery startup aimed at the college crowd. Through mutual friends, Schauff and Skelly met Nick Becker, who became LineLeap’s third co-founder.
While still undergrads — Schauff at the University of Wisconsin-Madison and Becker and Skelly at the University of Michigan — the trio began hashing out LineLeap’s business plan and building the website together.
“We launched on a negative-five-degree February night in Madison, Wisconsin,” Schauff said. “After night one resulting in success, we used that excitement and spent the next few years, mostly during our summer breaks, loading into the car and driving from college town to college town, trying to expand.”
LineLeap wasn’t the only line-skipping app out there at the time — and the trio knew it. So, to set their platform apart, the three co-founders decided to go after college bars as their first big customer segment.
The co-founders slept in beat-up motels — and their cars — traveling the country to sell to venues, sneaking into YMCAs for quick showers when they could. After a few years of grinding, the trio felt they’d proven out the business model and applied to Y Combinator.
They got accepted into the Summer 2019 cohort.
Flash forward to 2024. LineLeap survived the COVID slump and now has an office in NYC and a team of 40 people (not counting its part-time ambassadors). The app has 1 million users and over 400 college bar partners and is on track to process over $30 million in payments this year.
“One of our biggest challenges — getting in front of venue owners and getting them signed on — has also proven to be one of our largest differentiators,” Schauff said. “It’s hard to sign these venues, and we’ve cracked the code through relationships in the industry and a proven track record over the last seven years.”
Inequity and privacy concerns
Today, LineLeap offers quite a bit more than line-skipping passes. Using Venmo, PayPal, Apple Pay, or an attached credit card, users can buy concert tickets, pay cover, pre-order drinks, and reserve VIP table/bottle service. They also get notified — via push notifications and email — of special events and promos, while venue owners get access to dashboards showing transaction reports and analytics.
Events run the gamut from DJ nights to football watch parties to stand-up comedy shows.
There’s a social component as well. Users can add their contacts to LineLeap to see where they’ve “checked in,” if they’re also on the app. And LineLeap rewards points for completing tasks like snapping a photo at a venue — points that can be cashed in for passes.
LineLeap makes money by charging Ticketmaster-style convenience fees for certain passes. The company also imposes fees for “newfound revenue” on venues — that is, revenue that the venues weren’t generating beforehand, such as sales of skip-the-line passes.
“Venues generate a significant new revenue stream, while also gaining the ability to communicate and market directly to their top customers via the LineLeap platform,” Schauff said. “For venues, LineLeap has no costs and is entirely risk free, so they can partner and launch with us on a moment’s notice with no downside.”
I’m not sure I’d agree that there’s no downside.
LineLeap is yet another example of tech that’s letting the wealthy avoid waiting. CNN’s Nathaniel Meyersohn called it a “booming industry of advantages” — advantages that come at the cost of a worse experience for less fortunate patrons and that raise concerns about service quality and fairness for those who aren’t willing to spend top dollar.
That could backfire for some venues. As one reviewer writes of LineLeap’s app on the Google Play Store: “Yeah, if a bar ever makes you pay to make a reservation … find a new bar.”
Schauff tried to assure me that there’s nothing to worry about.
“In this industry, there’s been a new wave of operators and an overall change in mindset to adopt technology and data solutions, which LineLeap has been at the forefront of,” he said. “Venue operators are now craving more data-backed solutions for marketing purposes and better technology that can help them increase their bottom line.”
That seems like a potential privacy issue, too.
I asked Schauff about LineLeap’s data retention policy, including how long the company stores user data and whether users can delete their data at any time. He declined to answer in detail, instead referring me to the terms of use on the LineLeap website.
The terms, concerningly, don’t give a firm data retention time frame, and say that LineLeap may be “unable to fully delete or de-identify” user data due to “technical” or “other operational reasons.”
In a follow-up email after this story was published, Schauff clarified: “The data we collect is retained as long as needed to run our services, both the products and general marketing. Customers can request for their data to be deleted and our policy is to remove marketing related data, but we have to retain data about purchases that businesses are required to record-keep. The data is shared with venues that customers transact with for their records as well. We do not sell data to any third-parties.”
For now, Schauff says that the cash is being put toward expanding LineLeap to more venues in the nightlife and entertainment industry (including clubs), introducing new in-app features and building a full-blown customer relationship management platform for bars.
“Plenty of others have tried to start line-skipping companies for bars and clubs, but none have successfully expanded into multiple markets and lasted more than a couple of years,” Schauff said. “We pride ourselves in being the company that will be our venues’ partner for years to come.”
