- Vori has raised a $10 million Series A for its grocery inventory software aimed at independent grocers.
- The software helps smaller supermarkets compete with Amazon, Walmart and Kroger.
- Ecommerce and inflation make inventory tracking essential, says CEO and co-founder Brandon Hill.
About a third of US supermarket sales are made at independent grocers, but many of these grocers don’t have the technology of bigger players like Kroger and Walmart.
Vori, an inventory management startup, presents itself as a solution for those smaller grocers — a position that just helped it raise $10 million.
The company announced its Series A on August 3. TheFactory, a venture 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 so far.
National grocers have ramped up their investments in technology in recent years, with online sales being a major contributor. Companies spend a significant portion of that infrastructure tracking which products are in stock and which out-of-stock items the store needs to reorder, said Brandon Hill, Vori CEO and one of the 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 create in-house tools for inventory management, order fulfillment and analytics that these big chains have access to,” he said. Before working with Vori, many of the startup’s clients still managed inventory using paper and pencil records.
“The supermarket is the largest non-digitized retail format in the world, but at the same time, grocery shopping is the most common shopping behavior on the planet,” Hill said.
Vori’s software allows grocers to track inventory from when suppliers deliver products to the loading dock at the back of the store, making it easier for grocers to verify they’ve received what they’ve ordered and to replenish their own inventory .
Stores using Vori can also adjust prices more quickly — a valuable tool given the narrow profit margins supermarkets operate with and inflation that is pushing up consumer food prices, Hill said.
“That means the grocery store price coordinator no longer has to go through an invoice line by line with a ruler and marker to see that the cost of pickles has gone up by five cents,” Hill said.
Independent grocers accounted for 33% of U.S. retail sales in 2020, up from 25% a decade earlier, according to a survey commissioned by the National Grocers Association.
Many of these are family businesses that have been under the same management for decades. But as younger relatives take over the business, Vori’s pitch gets easier, Hill said.
“Every year that goes by, more and more ownership will 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 accessible to everyone, Hill added. “One of my favorite compliments we’ve ever received from one of our customers is that Vori is as easy to use as Candy Crush,” he said. “And that came from a 70-year-old user, by the way.”
Hill said his pitch to potential investors cites several factors, including the growth in online supermarket sales since the start of the pandemic and the growing share of supermarket sales through smaller supermarkets. Analysts expect digital grocery sales in the US to grow 20.5% this year to $147.51 billion.
Getting clients on board as investors and promoters of Vori is key, he said, because they can explain what the startup has done for their company.
“Our clients have been our most active and enthusiastic investors,” Hill said. Some of their clients have reached out to investors by phone to discuss their experience with Vori and to secure funding, he said.
Most venture capitalists buy their groceries from Amazon, Instacart or DoorDash, but are less familiar with the opportunity to partner with local grocers, he said.
Check out the 13-slide pitch deck that Vori used to raise his $10 million Series A round: