In a bid to alleviate cash flow strain for small hospitality operators and to assist suppliers who are increasingly acting 'like banks' burdened with chasing payments, wholesale food and alcohol ordering marketplace platform FoodByUs has today launched a new 'seamless' trade finance product for the industry.
With no fees involved, FoodByUs’ new finance product has been developed in partnership with trade financing platforms Shift and Butn (ASX: BTN) to guarantee suppliers instant payment, while providing buyers with the flexibility of up to 30-day payment terms.
Further, FoodByUs says it will take full responsibility for instant supplier payments regardless of whether a venue ends up paying its bills or not, giving wholesalers confidence to use the platform too.
FoodByUs, founded in 2016 by Tim Chandler, Gary Munitz and Ben Lipschitz, hopes the financial product will be a ‘game changer’ for the more than 80,000 independently owned and run restaurants and cafes across Australia.
Initially started as a one-stop-shop marketplace for independent hospitality operators to source food and alcohol, FoodByUs has since turned into an advanced software procurement system that helps venues run their entire back-of-house operations from ordering to invoicing, and now payments and finance.
The launch of the new product comes just over two months after the company raised $12 million in a Series B funding round led by Base Capital, with funds deployed for further development of the group’s procurement platform.
“Trade financing is a critical function in the hospitality industry typically done one on one between venue and supplier,” says FoodByUs CEO Ben Lipschitz, who was the winner of the 2022 Sydney Young Entrepreneur Award in the Hospitality & Tourism category.
“This is incredibly cumbersome for venues who need to fill out and manage multiple credit applications and limits, while suppliers themselves are acting like ‘banks’ and are burdened with having to chase payments as well as being exposed to the possibility of not getting paid at all," says the co-founder, one of Australia's Top 50 Young Entrepreneurs.
“There is no other software in the hospitality industry that allows suppliers and their customers to transact seamlessly with the backing of a best-in-class trade financing product. A typical ‘credit application-to-ordering’ period can be over 4 weeks when a restaurant wishes to engage a new supplier - with FoodByUs it is 90 seconds.”
On board with the new tech is payments platform provider Shift, which closed a $27 million Series C funding round led by Sequoia Capital Southeast Asia in February.
Shift CEO Jamie Osborn said that integrating the company’s Shift Trade product with FoodByUs will help break the traditional payment terms and cashflow issues that hospitality businesses otherwise must navigate.
“FoodByUs is a prime example of a business enabler for the hospitality sector, streamlining procurement for their customers,” said Osborn.
“Integrating Shift Trade with the FoodByUs platform even further streamlines business processes, giving customers favourable trade terms alongside certainty of spend.”
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