Pepper, an e-commerce platform for food distributors, continues to make inroads into Cisco and US Foods territory by giving small, independent distributors a technology edge.
The company has developed an ordering system for independent food distributors that supports a catalog of over 100,000 items. This allows these businesses to launch mobile apps or their websites to accept orders and payments online.
Co-founder and CEO Bowie Chan, who previously worked at Uber Eats, said the company now has 200 customers in a market of 25,000 food distributors. Told. But Cheung said Pepper wants to grow by fostering independent distribution and technology relationships.
“Generally speaking, these businesses have been underserved by the big broadline distributors like Cisco and US Foods,” Cheung told TechCrunch. “If you enjoy the diversity and vibrancy that non-chain restaurants bring to your community, you already understand the importance of that independent outlet, and that's what we've always provided. And they are the very customers we continue to serve today.”
Pepper accomplishes this by developing dozens of new product features each year that leverage advanced technologies such as generative AI to improve experiences, efficiency, and results. The company's proof points include increasing customer sales by 23%, having a 93% buyer retention rate, and saving more than 10 hours of work time per salesperson per week. said Mr. Cheung.
There are several players in the e-commerce food distribution space using Pepper, such as Choco, which has developed a sustainable food system for restaurants and suppliers. Cut+Dry and Anchovi are DotFoods' white label food service e-commerce platforms.
Cheung believes what sets Pepper apart is that all of its competitors have a marketplace-first strategy of downloading apps. He said there is no “Pepper app,” but rather a distributor strategy. This means that the distributor's brand identity is front and center, rather than Pepper's brand identity.
Customers seem to like it too. The 140-plus customers are double the number of customers Pepper had when it raised $16 million in Series A funding in 2021.
Since then, the company has become a full-stack payment processor. This makes it easier for carriers to pay distributors. We also “reimagined” what modern customer relationship management and co-pilot software should look like to help food distribution salespeople be more productive. Additionally, the company has built an advertising platform that allows distributors to promote their existing products by running marketing campaigns with their suppliers.
Cheung did not discuss specifically Pepper's revenue, but did share that it has grown more than 20 times. He also did not disclose the company's valuation, but said it was “a step up from the previous round.”
Investors also like Pepper. The company on Monday raised a $30 million Series B round led by new investor ICONIQ Growth, with participation from another new investor, Harmony Partners, and existing investors from Index Ventures, Greylock, and Imaginary. Announced. This will give the company a total of approximately $60 million in funding.
“ICONIQ Growth is the perfect partner for us,” said Cheung. “Their track record of supporting large, successful vertical software businesses and industries that aren’t necessarily considered in the consumer world really resonated with us, including food distribution. .”
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