Pepper, the eCommerce platform for food distributors, has raised $16 million in Series A funding that will enhance the ordering experience for distributors servicing over 25,000 restaurants and grocery stores in the U.S. and Canada. Index Ventures led the round with participation from Greylock, Imaginary Ventures, BoxGroup, Moving Capital, and Brett Schulman, bringing the total capital raised to date to $20M.

With the Series A secured, platform enhancements are a top priority for Pepper. “This funding enables us to accelerate product development in key areas such as digital payments and a product recommendation engine to grow sales,” says Bowie Cheung, co-founder and CEO. “Our existing clients have been asking for these features, and we’re excited to be able to create even more value for them.”

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“As we come out of the pandemic, it’s a privilege to partner with them by providing the tools that will unlock the next wave of growth and prosperity for their businesses.”

Cheung and co-founders Chetan Narain and Ivana Tesanovic have a shared passion about food and its importance as a fundamental global industry. Narain and Cheung met at UberEats, where they observed how quickly technology became a fixture in the average restaurant, and in contrast, how absent that same technology was in the day-to-day workflows of food distributors who work with restaurants everyday.

That insight led to the founding of Pepper and the launch of its first tools for NYC restaurants and suppliers in early 2020. Today, it’s evolved into a full service online ordering catalogue and payment system that takes advantage of the technology we use in our daily lives.

When restaurants and grocery stores order food from their distributors, 80% of the time they leave that order on a voicemail, with no paper trail, accessible order history, or ability to double-check after the fact. And 80% of payments are made to distributors by mailed-in paper checks—many distributors have drawers of uncashed checks to prove it. Pepper recognized where miscommunications happened, money was lost, and food was being wasted.

Because the platform is tailor-made for food distributors, it has the ability to support catalogs with over 100,000 items for distributors in every category from dairy, to fish, to produce, and packaging. It enables businesses of all sizes to launch mobile apps and websites that make ordering online a real business growth engine, and provides flexible payment options that fit in any model.

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The easier it is for venues to order from a distributor, the more they’re willing to spend. Pepper’s data even shows that when their suppliers migrate customers from offline to online, the average revenue with that existing customer goes up 15%. Eliminating reliance on voicemail orders makes ordering more accurate and eases the workload for supplier staff, too.

Helping distributors grow and streamline their business is at the core of what Pepper aims to do. “When our partners have ideas on the best way to grow their business, we want to explore that with them,” says Cheung. “We want to put those tools at their fingertips.”

This Series A will be the next step in bringing those desires to life for the platform’s users. “Pepper is pursuing what we think is the next big opportunity in the restaurant industry: enabling restaurants to purchase $200B of annual food inventory digitally instead of via phone and email,” says Damir Becirovic, Principal at Index Ventures, and Pepper investor. “Pepper has built a great platform that they provide to food distributors, essentially enabling a Shopify-like eCommerce storefront for them.”

And enabling suppliers to better do what they do best is why Pepper was founded in the first place. “Everyday we get to work with leaders in the food supply chain who have built incredible businesses from the ground up and navigated industry highs and lows for decades,” says Cheung. “As we come out of the pandemic, it’s a privilege to partner with them by providing the tools that will unlock the next wave of growth and prosperity for their businesses.”

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