Overview
Seth Berkowitz founded Insomnia Cookies as a late-night cookie delivery business from his college kitchen in 2002, which has since grown to over 260 locations and generated over $200 million in revenue by 2023.
Founding Inspiration and Early Days
- The company originated from a desire for late-night snacks beyond typical pizza or burgers, specifically warm cookies.
- Seth spent $150 on baking supplies and tested recipes with friends and his then-girlfriend, who suggested the name Insomnia Cookies.
- Initial sales were made door-to-door and on campus, with marketing through flyers and cookie samples.
- After a school newspaper feature, orders increased from three to eighty per night.
- Seth made $10,000 profit in his first semester, leading him to continue the business.
Growth and Expansion
- Seth created a website for online cookie orders and managed logistics alongside his classes.
- Production moved from his kitchen to a commissary, and he hired friends to keep up with demand.
- Co-founder Jared Barnett joined; expansion included delivering to additional campuses and securing angel investment for new stores.
- The first official store opened in Syracuse, NY, in December 2004, followed by strategic campus-area expansion.
- Jared exited the company in 2006, retaining a 5% economic interest in case of liquidation.
Scaling Challenges and Recovery
- Insomnia Cookies added menu items and experimented with food trucks.
- The 2009 financial crisis led to corporate downsizing, but Seth persevered with continued expansion.
- By 2012, the company opened its 22nd store and self-funded further growth, leading to 125 new locations between 2012–2018, aided by mobile app culture.
Acquisition and Legal Disputes
- In 2018, Krispy Kreme Doughnuts acquired a majority stake for $140 million.
- Co-founder Jared Barnett sued for non-payment of his 5% interest from the sale; Seth settled for $3.5 million.
- Additional funding rounds followed, totaling $4.5 million to support expansion.
Recent Developments and Current Status
- As of 2023, Insomnia Cookies operates 260+ locations across the US, Canada, and the UK, offering traditional, deluxe, vegan cookies, and more.
- Prices now range from $2.50 to $5.45 per item, with stores open late and some until 3 a.m.
- The company opened its Philadelphia headquarters in 2024 and continues to focus on delivering late-night experiences.
Key Figures and Milestones
- $150: Initial investment in baking supplies.
- $10,000: First semester profit.
- $140 million: Krispy Kreme acquisition amount in 2018.
- Over $200 million: 2023 company revenue.
- 260+ stores: Current international footprint.