This morning, our newest portfolio company, SKUPOS, announced their seed round. We’re excited to partner with Jake, Mike, Linh, and Nam as they work towards building a marketplace that serves C-stores and their distributors in a more timely, transparent, and cost-effective way.
SKUPOS was a member of our first accelerator class and in the process, we realized how passionate the team is at solving a problem they experienced first-hand when selling a gas can through the channel. It resulted in a nationwide road trip going from c-store to c-store to understand the pain points faced by c-store employees. Through the accelerator, they continued to discover how antiquated inventory and the purchasing process were on the distributor side of the equation.
To give you an idea of the opportunity, consider this- C-stores are extremely fragmented with over 60% of the market in the hands of independent owners but grow at roughly the rate of GDP each year. It’s a business where ever bit of margin counts and massive leaps in productivity are a boon to store owners. C-store employees can spend several hours/day maintaining inventory which is usually done with pen and paper. At which point, new orders are generally done either by phone or when distributors stop by for restocking.
On the distributor-side of the equation, there is little if any visibility as to whether items are successful or not, sell-through trends, regional penetration (one distributor didn’t know they had items being sold out West in a c-store, till they got a demo of SKUPOS), stock-outs, and more. Distributors have a legion of employees who visit c-stores in their territory weekly, recount what’s on the shelf by hand, confer with the manager on duty, and replenish stock if they have items on the truck. If they do not have the necessary items on the truck, they will make note of it and will provide a refill on their next run (usually a week later).
All this spells opportunity for SKUPOS. Their integrated solution provides real-time inventory, automated purchasing, and operational intelligence to c-store operators and their distributor partners.
We’re excited to help the founders build a successful business alongside Toba Capital. In connection with the round, both myself and Patrick Mathieson (Toba) will join the Board of Directors.