- Vori 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.
- E-commerce and inflation are making inventory tracking key, CEO and cofounder Brandon Hill said.
Roughly a third of US grocery sales happen at independent grocers, but many of these grocers lack the technology of bigger players like Kroger and Walmart.
Vori, an inventory-management startup, 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 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.
National grocers have stepped up their technology investments in the last several years, with online sales prompting much of it. Companies devote a significant part of that infrastructure to tracking what products are in stock and which out-of-stock items the store needs to reorder, Brandon Hill, Vori’s CEO and one of its cofounders, said.
Vori’s inventory software provides inventory services to grocers that might 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 replenishment, and analytics that these big chains have access to,” he said. In fact, before working with Vori, many of the startup’s customers still managed inventory using paper-and-pencil records.
“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 starting from when suppliers deliver products to the loading dock in the back of the store, making it easier for grocers to verify that they’ve received what they ordered and begin replenishing their own stock.
Stores that use Vori can also adjust prices more quickly — a valuable tool given the narrow profit margins that grocery stores operate on and inflation pushing consumer grocery prices higher, Hill said.
“That means the grocery-store pricing coordinator no longer has to go through an invoice line-by-line with a ruler and a highlighter to see that the cost of pickles has gone up by five cents,” Hill said.
Independent grocers made up 33% of US retail-grocery sales in 2020, up from 25% a decade earlier, according to a study by the National Grocers Association commissioned.
Many of those are family-owned operations that have been under the same management for decades. But as younger family members step up to take over the business, Vori’s pitch becomes easier, Hill said.
“Every year that passes, more and more ownership is going to transfer to the younger generation,” which is going to replace those outdated systems with options like Vori, he said.
But the startup makes its software accessible to everyone, Hill added. “One of my favorite compliments that we’ve ever gotten from one of our customers is that Vori is as easy to use as Candy Crush,” he said. “And, by the way, that came from a 70-year-old user.”
Hill said his pitch to potential investors mentions several factors, including the growth of online-grocery sales since the start of the pandemic and the growing share of grocery sales happening through smaller supermarkets. Analysts expect US digital-grocery sales to grow 20.5% this year to reach $147.51 billion.
Getting clients on board as investors and promoters of Vori is key, he said, since they can explain what the startup has done for their businesses.
“Our customers 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 secure funding, he said.
Most venture capitalists buy their groceries from Amazon, Instacart, or DoorDash, but are less familiar with the opportunity to work with local grocers, he said.
Check out the 13-slide pitch deck that Vori used to raise its $10 million Series A round: