A new grocery software player has just raised $10 million to compete in the nearly $150 billion online grocery segment. Check out the 13-page pitch deck that helped Vori win the deal.

  • Vori raised $10 million Series A for its grocery inventory software aimed at independent grocers.
  • The software helps smaller supermarkets compete with Amazon, Walmart and Kroger.
  • E-commerce and inflation make inventory management essential, said CEO and co-founder Brandon Hill.

About one-third of U.S. grocery sales are at independent grocers, but many of these grocers lack the technology of larger players like Kroger and Walmart.

Vori, an inventory management start-up, pitches 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 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 so far.

National grocers have ramped up their investment in technology in recent years, with online sales being a large part of the impetus. Companies spend a significant portion of that infrastructure tracking which products are in stock and which out-of-stock items need to be reordered, said Brandon Hill, CEO of Vori 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 internal tools for inventory management, order fulfillment and analytics that these major chains have access to,” he said. Before working with Vori, many of the startup’s clients even managed inventory using paper and pencil records.

“Grocery is the largest non-digitalized shopping format in the world, but at the same time, grocery shopping is the most common shopping behavior in the world,” Hill said.

Vori’s software allows grocers to track inventory from the moment suppliers deliver products to the loading bay at the back of the store, making it easier for grocers to verify that they’ve received what they ordered and to replenish their own stock .

Stores using Vori can also adjust prices more quickly — a valuable tool given the tight profit margins supermarkets operate on and inflation driving up consumer food prices, Hill said.

“That means the supermarket price coordinator no longer has to go through an invoice line by line with a ruler and a 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, compared to 25% a decade earlier, according to a study 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.

“Each year that goes by, more and more properties pass to the younger generation,” who are going to 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 grocery sales since the start of the pandemic and the growing share of grocery shopping through smaller supermarkets. Analysts expect digital grocery sales to grow in the US 20.5% this year to reach $147.51 billion.

Getting clients on board as investors and promoters of Vori is essential, he said, because they can explain what the startup has done for their company.

“Our customers have been our most active and enthusiastic investors,” said Hill. Some of their clients have called investors to talk about their experience with Vori and securing 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 Vori used to raise his $10 million Series A round:

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