Hospitality technology platform Ordermentum has acquired wholesale food marketplace Foodbomb in emerging signs of consolidation for Australia’s ordering and payments sector, supported by a $16 million oversubscribed capital raise that values the combined group at more than $100 million.
Described as Australia’s leading ordering and payments platform for the wholesale food and beverage industry reaching a base of 40,000 venues, Ordermentum says the Foodbomb acquisition will cement its position as a powerhouse in the sector.
Backed by existing investors Matt Rockman, David Gordon and Perennial Private Ventures Fund, the $16 million capital raise has also attracted new shareholders in Microequities Asset Management, Aditum Ventures and listed investment fund Touch Ventures (ASX: TVL).
Gordon, a Nudie Juices co-founder, has backed Ordermentum since its formative years after it was established by Adam Theobald and Andrew Low in 2014. Low at the time was growing speciality coffee brand Toby's Estate. Rockman, the SEEK (ASX: SEK) co-founder, led a $6 million raise for Ordermentum in 2021.
Ordermentum is now being used by almost half of Australia’s hospitality venues to place more than $1.2 billion in orders each year for goods from Australian food and beverage suppliers. Its growth is reflected in the past year's orders representing a third of the $3 billion the company has transacted over the past nine years.
Foodbomb was founded in 2017 by Paul Tory and Josh Goulburn and over the past six years has processed $100 million in transactions from 13,000 venues through its network of suppliers.
“Both the Ordermentum and Foodbomb teams have built a deep understanding of the unique needs of food and beverage suppliers and hospitality venues,” says Theobold, the CEO of Ordermentum.
“Collectively, we have a commitment to bringing together the best operators in the space in an easy-to-use ordering and payment platform that helps the entire industry save time and money.
“We see this acquisition as a chance to do more by adding over 100 fantastic suppliers for our venues to choose from and allowing us to invest more to help our suppliers find new customers and streamline their operations.”
Theobold says the Ordermentum platform currently generates more than 25,000 leads for its suppliers every year.
“We desperately need new suppliers around the country in fruit and vegetables, meat, poultry, seafood and smallgoods and we have long recognised that these are the verticals where Foodbomb are strong. We believe that this acquisition can accelerate our growth by two years - it’s a big win-win.”
Ordermentum notes that more businesses in the wholesale food and beverage sector are seeking to digitise their systems in the wake of increased cost pressures. But Theobald says many businesses struggle to find a way to do it.
“When I co-founded the company in 2014, I recognised dual problems in the industry,” he says.
“On one side, venues complained about old-fashioned manual ordering and payment methods - phone, fax, email - and on the other side, food and beverage suppliers knew they needed to modernise and go digital but didn’t know where to start.
“Ordermentum began from that insight. However, despite increased technology adoption in many parts of society, and the acceleration through COVID, many food and beverage suppliers are still living in a pad-and-paper world.
“Several suppliers during the pandemic told us they would have ‘gone under’ without our services, which is humbling. Sadly, we’re seeing a similarly challenging mix of macro-conditions, with cost-of-goods increases, wage inflation and a potential recession.”
Foodbomb CEO Paul Tory co-founded his company following a 25-year career in the wholesale meat industry.
“My family owned a butchery business and I’d find myself spending hours processing venue phone orders - many of which were indecipherable,” Tory says.
“A guy would call to say ‘hey, it’s me, I’m after 50 steaks, thanks’. It was so inefficient, and I thought there had to be a better way.”
Tory says since establishing Fodbomb he has ‘long admired’ the Ordermentum business.
“More recently, we've had the privilege of getting to know Adam Theobald and the exceptional Ordermentum team as neighbours,” he says.
“The synergies between our two companies have always been evident, and when Adam approached us with the idea of merging late last year, I was immediately excited by the potential and Adam's vision for the future of the industry.
“I have no doubt that the coming together of Ordermentum and Foodbomb will create an unrivaled powerhouse in the wholesale food and beverage industry.”
Goulburn says the synergies between Foodbomb and Ordermentum were ‘too strong to ignore’.
“Both businesses already had some really exciting plans, but together we have the opportunity to really accelerate and solidify our position as the most dominant force in the space,” he says.
Theobold says the $16 million in fresh capital raised will see Ordermentum ‘double down' its investment in the Australian food and beverage industry.
“This capital will accelerate us in achieving our ambition to digitise the food and beverage industry and help venues and suppliers across Australia trade smarter and more sustainably,” he says.
The latest consolidation in the digital ordering space for the hospitality industry comes on the heels of hospitality industry tech startups Mr Yum and me&u confirming they were undertaking preliminary merger talks earlier this year. However, no deal has emerged.
While these platforms provide digital ordering services for hospitality venue patrons, both are making inroads into international markets and growing volumes domestically.
In July, Melbourne-based loyalty and engagement platform Liven announced the acquisitions of Australian-based OrderUp and Abacus, Singapore-based Zeemart and Silicon Valley-based Copper to make it the largest end-to-end hospitality technology group.
Ordermentum, which supports a team of 100, has invested more than $25 million in its platform and business. It has 850 suppliers on its books nationally that can connect with the 40,000 venues on its books.
Foodbomb’s platform aggregates wholesale food suppliers into a single site, enabling hospitality venues to seamlessly search, compare, and order from a diverse range of more than 50,000 products across 19 categories.
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