M8 Ventures backs Preplocal
We’ve joined with the angels in our M8 Syndicate to invest in a seed round for Sydney-based Preplocal, which is fixing food and beverage distribution.
Here’s what’s wrong with the way food and beverage products are distributed today:
High costs and poor service
In our due diligence, we spoke with a number of brands who told us that they have paid distributors as much as 35% per order. Brands get poor service and support, payments are late, and inefficient operations impact their margins and growth.
Limited reach and high barriers to entry
Distributors typically operate within specific territories, limiting the reach of SME brands. High minimum order requirements and associated costs limit market access for smaller brands even more.
Complex logistics and lack of transparency
Supermarkets handling a mix of distributors and brands face complexity and higher workloads. This leads to limited product selection, increased prices, and lower-quality produce.
Misaligned incentives and inefficiencies
Distributors sometimes prioritise their stock clearance and margins over the growth and market penetration of individual brands. This means slow long-term growth for brands and a crappy experience for retailers and consumers.
Channel conflicts and information asymmetry
Brands we interviewed told us that when working with traditional distributors they have hardly know anything about where their products are stocked, who their customers are, and what’s happening in the market.
How to fix distribution
Preplocal aims to reduce distribution costs, offer better support and increase service quality.
Lower minimum order requirements and fewer territory limitations helps smaller brands access a bigger market. The platform’s no-barrier-to-entry approach is designed to democratise market access for small and artisanal brands.
Preplocal can consolidate orders from multiple brands into a single, efficient delivery similar to the way Amazon ships products for consumers from multiple brands in one delivery. The platform is designed to automate logistics optimisation, from warehousing to delivery, for cost-effective and timely fulfilment. Retailers get a simplified procurement process with one checkout, one delivery, and one invoice.
Preplocal aims to give brands more control over their pricing, strategy, and customer relationships with a transparent and data-driven approach, aligning incentives between brands and supermarkets, fostering long-term growth.
Preplocal will give brands increasingly real-time market insights and greater visibility over their supply chain than existing solutions. Dynamic aggregation and volume discounts will help buyers make informed decisions, optimise their operations, and make shopping better for us, the consumer.
Who is Preplocal?
Preplocal is a four-piece:
- Sean Miller, Co-founder and Business/Sales
- Mathieu Jamet, Co-founder and Business/Tech
- Colleen Heikkinen, Producer Success; and
- Murtaza Aziz, Product Developer
Who else loves them?
We invested in this round alongside Skalata (which was following on) and Colopol Next.
How we found this deal
Alan met Sean at a family-and-friends Christmas lunch (true story).
Why we invested
- Mathieu and Sean are the classic cofounder pairing of a hacker and a hustler
- Lived experience as a hospitality entrepreneur and a senior software engineer in the food and beverage industry
- Could prove they had customer demand on both sides of the platform
- Making smart decisions about how to develop an enterprise SaaS platform
- Operating in a large, valuable and inefficient industry
- Starting local, already thinking global
Shout out to
- The 12 M8 Syndicate angels who invested alongside us in the Preplocal deal
- Duncan Stone and family for the Christmas lunch.
