Sourcery Technologies Inc. has raised $5 million in venture funding for software that helps restaurateurs and corporate kitchens order from vendors, keep track of their inventory and costs, and figure out the appropriate prices for different ingredients.
Marker LLC led Sourcery’s new round joined by Steadfast Venture Capital and the company’s earlier backers including Palantir and others.
Sourcery co-founders Na’ama Moran (CEO) and Peretz Partensky explained that accounts payable is incredibly paper-driven in the restaurant business today.
Most restaurants still place orders by phone and pay for them by check. With every single delivery that comes in to a restaurant, there is an invoice that can get lost, or stained. And when you have a restaurant with multiple locations it becomes even more complex.
“All of this can make cash flow management really hard, and that’s unfortunately one reason why a lot of restaurants go out of business,” said Moran.
According to Restaurant Reports guidelines, to achieve profitability, table service businesses should aim to keep food costs below 35% of their total costs.
Sourcery allows restaurants to use the scanners they typically have on site to upload invoices or receipts and send them, by email, to Sourcery’s app, which extracts the data from them, and organizes it.
Moran said the company plans to use its new funding to develop an accounts receivable feature for vendors—from large food service distributors to small local farms — that will automatically issue invoices, track them and bill customers through the app.
Marker LLC Principal Lluis Pedragosa said Sourcery’s software-as-a-service felt inevitable: “While there has been a lot of consumer facing tech development in the food and hospitality space, we’ve seen fewer emerging solutions focused on the day-to-day business and financial needs of restaurant owners and operators.”
The investor expects Sourcery to use its new venture funding to further develop its accounts payable app giving restaurants data insights and new, enterprise features in the near term. Longer term, investors believe Sourcery has the potential to expand even beyond food and restaurants into other verticals.
Moran said this could include helping restaurants purchase and keep track of spending on equipment or appliances, for example.