One of the co-founders of hospitality startup Hey You has secured $5 million in funding for his new venture Ordermentum, offering a tech solution to tidy up the relationships between suppliers and venues.
The idea for Ordermentum was born out of a frustration founder Adam Theobald noticed among Hey You’s cafe, restaurant and bar clients, he tells SmartCompany.
They were managing multiple relationships with multiple suppliers, each with different order methods, different payment terms and different schedules.
“They used to show me a drawer full of invoices, which would make my skin crawl,” Theobald tells SmartCompany.
The Ordermentum platform strives to help venues manage those relationships. Like Hey You, it’s still solving order and payment issues, Theobald explains, however this time, it’s between the venues and their suppliers.
Launched in 2015, the startup now has more than 25,000 venues and 500 suppliers on the platform, and is topping more than $600 million in gross merchandise value per year, says Theobald.
This funding round, led by Pure Asset Management, will give the startup the boost it needs to meet that increase in demand.
The startup is also investing in growing the team, “to take us to the next level”, and in developing new solutions to help tackle more customer pain points.
“There’s so much more opportunity than we’re currently touching,” Theobald says.
“By my estimation, as fast as we’re growing … we’re only 1% or 2% into the total opportunity for Ordermentum in Australia alone.”
A new hospitality frontier
The need for a product like this is particularly pertinent in the post-COVID-19 environment.
Over the past couple of months, we’ve seen venues hit by snap lockdowns and forced to close with very little notice. Most recently, in Melbourne, the lockdown came over Valentine’s weekend and Lunar New Year.
Anything that can help streamline business for suppliers, including the frequency of orders and payments, can “significantly reduce the noise throughout your business”, Theobald explains.
“So, when there’s a big shift in demand … you don’t have these terms blowing out rapidly,” he adds.
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“You’re able to manage your cashflow.”
The same is true for the venues themselves. Being able to track payments in one place can help them track what they’re spending in uncertain times.
And Theobald himself is no stranger to this uncertainty. This funding round was originally set to close in early 2020, but was scrapped as the pandemic hit.
He doesn’t presume to understand the strain hospitality businesses were under, he stresses, but he does know how it is to feel stuck between a rock and a hard place.
“I’ve never experienced anything like it — just the sheer combination of uncertainty and fear was difficult for all business owners.”
Theobald points, however, to the resilience of this sector. Ultimately, things could have gone a lot worse, he says.
Ordermentum initially saw volumes drop by 50%, for a few weeks, but after that, Theobald says new habits started to emerge. People were spending at suburban cafes, and hospitality businesses were innovating to offer takeaway services and experiences.
Now, volumes are up more than 140%, compared to pre-COVID levels, he says. Half of that can be attributed to new business.
Ultimately, hospitality businesses are looking to “trade smarter” he says, leading to more digitisation, and more willingness to adopt tech solutions.