Storewise Inc. is refilling its cupboards with a majority investment from Nexa Equity LLC.
The Overland Park-based startup provides retail automation software that helps independent grocers compete against national and regional chains and big-box retailers. Founded in 2016, its platform includes features such as identifying cost issues that affect a grocery store's profitability, risk reduction, inventory forecasts and automating decisions around temporary price reductions.
"Storewise plans to utilize the investment from Nexa Equity to further support its customer base, develop new products and accelerate go-to-market efforts," a Tuesday release said. The company also will be considering acquisitions to build a more robust automation and business management platform.
Nexa Equity is a San Francisco-based private equity firm focused on scaling lower-middle market software and fintech businesses. It has more than $300 million in private equity capital under management.
Storewise's existing management team will continue to lead the business. According to the Kansas City Business Journal's most recent Private-Sector Employers List, the company had 29 local employees as of June
Financial terms of the transaction were not disclosed.
"We've been thoroughly impressed by what the Storewise team has built to date and believe that by further investing in product development and strategic M&A, Storewise will be even better positioned to deliver value to independent grocers," Vlad Besprozvany, founder and managing partner of Nexa Equity, said in the release.
Storewise, which currently serves more than 700 stores across the country, recently landed a new partnership with Affiliated Foods Inc., a wholesale distribution cooperative that serves 800 independent grocery and convenience stores in nine states.
It also has a separate agreement with Associated Wholesale Grocers Inc., the nation's largest cooperative food wholesaler to independent grocers. The Kansas City, Kansas-based cooperative serves more than 3,100 independent store locations in 28 states.
"The Storewise team takes pride in working with independent grocers, who play a vital role in our communities and employ more than 1 million Americans. We're dedicated to supporting an industry critical to our nation's economy by building a unified software platform that helps independent grocers operate more profitably and efficiently," Storewise CEO Christopher Greco said in the release. "We're excited to have found a like-minded growth partner in Nexa Equity that shares our core values and will help accelerate our vision. The pace at which Storewise is being adopted, and the positive results grocers are experiencing, let us know that we're on the right track."
With the ongoing concerns over rising food costs, Storewise's price analysis technology can help grocers make smarter buying decisions, Greco told Kansas City Business Journal in July 2021. The software can help grocers adjust store prices to maximize profits, and it will send alerts when a product goes on sale at the warehouse. Ultimately, its software can help grocers achieve a 1% to 2% margin increase, which may not sound like much to the average consumer, he said. But for grocers with multiple locations, it can translate to millions of dollars in incremental profit.
According to KCBJ research, Gil Anderson, the founder of Storewise, and Leawood Venture Capital, a locally based venture capital firm, were the primary owners before this deal. It's not clear if they retain a stake in the company.
The startup, formerly known as Retail Software Solutions Group, along with Main Street Data, Pepper and SquareOffs were part of Leawood VC's Fund I portfolio. The firm did not participate in KCBJ's most recent Private Equity and Venture Capital Firms List. It last reported having $82 million in capital under management in late 2020.
Stinson LLP, a Kansas City-based law firm, served as legal counsel to Storewise. New York-based Weil Gotshal & Manges LLP and Chicago-based Kirkland & Ellis LLP served as legal counsel to Nexa Equity.
