Sourcery is an electronic invoicing platform for wholesale food buyers and sellers.
Typically, restaurants deal with tens, if not hundreds, of different suppliers. For example, they would have four different meat suppliers, another three different vegetable suppliers, a couple bakeries, a separate beverage supplier, and even a dish-washing supplier.
This makes it extremely difficult for restaurant owners to keep track of everything they order, because each supplier has different payment terms, dates, and catalogues. On top of that, the food industry is still largely run offline, where payments are done by checks and paper invoices.
Y Combinator grad Sourcery, which came out of stealth mode Friday, is a startup that's trying to end this decades-long problem. It provides a platform where food suppliers and buyers can manage their entire transactions online. From electronic invoicing and payments to product viewing and order placements, Sourcery takes care of a big part of restaurant operations that usually takes huge amounts of time for owners.
"By essentially taking over this part of the operation, we're enabling our customers to really focus on what they really love to do: cooking food," Sourcery's CEO Na'ama Moran told Business Insider. "Restaurant owners are really passionate about food, but they really don't like to manage cash flows."
Sourcery also makes it easier for buyers to find suppliers across the country. Because of its fast-growing user base, it's creating a social-network-like platform for wholesale food suppliers and buyers. With just a single click, restaurant owners can connect with local farmers and place orders whenever they want.
Because of this, Sourcery has already built a quite impressive list of users. Some of the leading tech companies with their own kitchens, like Palantir, Dropbox, and Airbnb, are all Sourcery users. Popular restaurants like La Mar, 'witchcraft, and Hops & Hominy are also on it. Munchery, a SF-based food delivery startup that makes thousands of meals a day, also relies on it.
Moran didn't share actual sales figures or the number of clients it has, but did note that its sales has been doubling month-over-month. That translates to over millions of dollars in monthly transaction volume, she said. That's a good start when you consider the entire wholesale foodservice industry is worth $220 billion.
In fact, some of the biggest venture capitalists are already taking note of Sourcery's huge growth potential. Palantir's cofounder Joe Lonsdale, Yammer CTO Adam Pisoni, and ex-Oracle CFO Jeff Epstein are all part of an investor group that committed $2.5 million in seed funding.
"Sourcery is solving a real business problem in a highly focused and underserved vertical with massive potential for network effects," Lonsdale said in a statement.
Electronic invoicing may not be anything new, especially when you consider the big players in the market, such as Tradeshift and Taulia. But Sourcery claims to differ from the rest because of its highly customized technology specifically designed for food vendors. And it already has a much bigger community of food vendors, which matters the most when you're building a niche marketplace platform focused on a single industry.
"We're doing something that no one else has done in this industry," Moran said. "We want to create a better food system and we believe our technology can make people's lives easier."