- Vori raised $10 million Series A for its grocery inventory software for independent grocers.
- The software helps small supermarkets compete with Amazon, Walmart and Kroger.
- E-commerce and inflation make tracking inventory essential, said CEO and co-founder Brandon Hill.
About a third of U.S. grocery sales are at independent grocers, but many of those grocers lack the technology of big players like Kroger and Walmart.
Vori, an inventory management startup, touts itself as a solution for these small grocers — a position that just helped it raise $10 million.
The company announced its Series A on August 3. TheFactory, a venture capital fund, led the round, which also included investments from Greylock Partners, E²JDJ, MKT1 and Mollie Stone’s Markets, a Bay Area grocer and one of Vori’s clients.
With the latest round, Vori has raised $15.3 million to date.
Domestic grocers have ramped up their technology investments in recent years, with online sales driving a large chunk. Companies devote a significant amount of this infrastructure to tracking products that are in stock and out-of-stock items that the store needs to reorder, said Brandon Hill, CEO of Vori and one of its co-founders.
Vori’s inventory software provides inventory services to grocers who may only have a few stores, Hill said.
“They don’t have teams of software engineers, data scientists, product designers to build internal inventory management, order replenishment, and analytics tools that these big chains have access to,” did he declare. In fact, before working with Vori, many of the startup’s clients were still managing inventory using paper-and-pencil ledgers.
“Grocery is the largest undigitized retail format on Earth, but at the same time, grocery shopping is the most frequent shopping behavior on the planet,” Hill said.
Vori’s software allows grocers to track inventory from the time vendors deliver products to the loading dock at the back of the store, making it easier for grocers to verify that they have received what they received. they ordered and begin to replenish their own stock.
Stores that use Vori can also adjust prices more quickly — a valuable tool given the tight profit margins that grocery stores operate on and the inflation that’s driving up consumer grocery prices, Hill said.
“This means the grocery price coordinator no longer has to go through a bill line by line with a ruler and highlighter to see that the cost of pickles has gone up five cents,” Hill said.
According to a study commissioned by the National Grocers Association, independent grocers accounted for 33% of retail grocery sales in the United States in 2020, up from 25% a decade earlier.
Many of them are family businesses that have been under the same management for decades. But as younger family members step up to take over the business, Vori’s speech becomes easier, Hill said.
“With each passing year, more and more ownership is going to be transferred to the younger generation,” who will replace those outdated systems with options like Vori, he said.
But the startup is making its software available to everyone, Hill added. “One of my favorite compliments we’ve ever received from any of our customers is that Vori is as easy to use as Candy Crush,” he said. “And, by the way, this is from a 70-year-old user.”
Hill said his pitch to potential investors mentioned several factors, including the growth in online grocery sales since the start of the pandemic and the growing share of grocery sales in smaller supermarkets. Analysts expect U.S. digital grocery sales to grow 20.5% this year to $147.51 billion.
Engaging customers as investors and promoters of Vori is key, he said, because they can explain what the startup has done for their businesses.
“Our clients have been our most active and enthusiastic investors,” Hill said. Some of their clients have taken phone calls with investors to talk about their experience with Vori and getting funding, he said.
Most venture capitalists buy their groceries from Amazon, Instacart or DoorDash, but are less familiar with the ability to work with local grocers, he said.
Check out the 13-slide pitch deck Vori used to raise his $10 million Series A round: