Hospitality food wholesale marketplace, FoodByUs, has raised $10 million in a Series A raise.
The round led by cornerstone investor Macquarie Capital, with support from Base Capital and New York marketplace investor F J Labs.
Despite the pummeling the sector has endured from ongoing lockdowns over the last 18 months, FoodByUs has seen annual sales increase by more than 600% since 2019. The team has grown from 38 to 55 during the pandemic and another 10 people are expected to join the company by Christmas.
The online hospitality marketplace connects restaurants, cafes, and caterers with hundreds of wholesale food and alcohol suppliers.
It was co-founded by Menulog co-founder Gary Munitz, Tim Chandler and Ben Lipschitz with the goal of creating a free ‘one stop procurement shop’ for small-medium sized venues. The business operates in Sydney, Melbourne and Brisbane and recently expanded into alcohol suppliers.
Lipschitz, the startup’s managing director, said the B2B (business-to-business) tech platform allows food venues to search and compare hundreds of thousands of products, with transparent and consistent pricing, and purchasing power normally reserved for much larger businesses.
“FoodByUs was built on the premise of improving the often overlooked ‘back of house’ function within hospitality venues,” he said.
“Using our deep experience in building marketplaces, we wanted to create something that could simplify the wholesale ordering process and get back time while increasing a venue’s bottom line. When these businesses can access a wider range of suppliers and best-in-market pricing, the whole industry benefits.
“For wholesalers we offer an additional channel to market with guaranteed payment.”
The platform also offers full cost reporting and automatically pushes all invoices into Xero.
Lipschitz said FoodByUs is in a high growth phase that will be accelerated by the raise at a time when technology is going to play a critical role in helping venues reduce expenditure and maximise profit as they emerge from the pandemic.
“The funds will be used to boost sales, marketing and product development. Although we’re already the leading solution in our market, this round will help cement FoodByUs as the dominant hospitality procurement tech in Australia,” he said.
“In the aftermath of Covid we are seeing many hospitality venues weighing up their options for how to re-open while still being profitable. As well as trying to make up for lost sales they’re also having to deal with social distancing restrictions and in many cases a drop in revenue as a result of tourism being significantly down.
Macquarie Capital’s VC team co-head, Dan Phillips said they had been investors in FoodByUs since the business started.
“The quality of its management has seen the business grow strongly, including through Covid. We are excited to continue to support FoodByUs and its mission to improve the efficiency of Australia’s massive independent hospitality industry,” he said.