Why ResilienceVC Invested: PartnerSlate

PartnerSlate is an online marketplace connecting food brands and contract manufacturers to help improve time to market and drive digitization in the $200 billion food and beverage contract manufacturing industry.

The Challenge

Imagine you are the owner of a quickly growing small business, producing and selling a chili oil recipe that has been in your family for years. You’ve been selling at your local farmers markets and gotten some great traction, and have just received your first contract from a regional grocery chain. In order to meet their demand, you will have to move on from the test kitchen you’ve been using and find a more commercial manufacturing solution. Since you are too small to build your own manufacturing operations, you’ll likely turn to a contract manufacturer (CM), an outsourced manufacturing provider, who can produce the quantities you’ll need to grow your business. Unfortunately, finding the right CM is an onerous, expensive, and slow process. You can hire a costly broker or consultant to help you find a CM or just start making hundreds of phone calls or sending cold emails to CMs, trying to find out if they have the right capabilities and capacity to handle your production. It can take 12+ months to find and begin production with a CM, which might be too late for you to fulfill the order timeline from the retailer. Additionally, even once you find a CM partner, you have to pay for the ingredients and manufacturing up front, even though you won’t get paid for 60 days after you deliver the inventory to the grocery chain. This working capital gap makes it incredibly difficult for you to grow your business and fulfill demand.?

The Opportunity

Small businesses like the ones above are not alone; around 20,000 new food products are created for commercial sale in the US annually, the majority of which come from emerging brands - small businesses who are looking for their first manufacturing partnership to bring their products to market. The natural partnership for these brands is contract manufacturers (CMs), but contract manufacturing capacity for emerging brands or new products is often hard to secure and the capabilities each brand requires from a CM vary and can be highly specialized. Even if a brand is able to find a manufacturer, the working capital challenges they face keep many early stage food brands from scaling effectively.?

The contract manufacturing industry is?large and growing, valued at $120B today and growing at ~10% a year. There are over 30,000 food manufactures in the US, but most CMs do not have a strong digital customer acquisition and onboarding process.? They receive a high volume of deal leads but lack the technology and personnel to effectively validate requests. 90%+ of the inquiries they receive are not a good fit for their capabilities or capacity, resulting in wasted time and cost. Additionally, once they close with a new brand or project, they have limited tools to track and report to their clients on quality, inventory, and production.?

The PartnerSlate Advantage

PartnerSlate has built the first-of-its-kind marketplace for contract manufacturers and food brands. Brands upload their specifications for production through their website and PartnerSlate converts the inputs into structured data, and then uses that data to match brands to top CM candidates using the detailed data they track on CM capabilities and capacity. PartnerSlate has cultivated relationships with over 2,000 CMs actively looking for new business. By replacing cold-calling with data science and AI, the PartnerSlate platform enables both sides to save hundreds of hours and can cut a brand’s search for the right manufacturing partner from months to days. PartnerSlate has already seen over $1B of GMV come through the platform and continues to grow rapidly with strong interest from both brands and CMs. In addition to the matching that PartnerSlate provides, they also offer working capital solutions embedded directly into their marketplace, allowing brands who can’t get affordable financing elsewhere to access it.?

For brands, the ability to quickly find a relevant CM and access a purchase order financing product within the platform can be game-changing, allowing them to get products to market without paying $100K or more up front for ingredients and manufacturing costs. By embedding a working capital loan into their platform, PartnerSlate can better serve brands, drive revenue, and maintain long-term customer value after the match is made.?

The PartnerSlate team brings significant experience in food and beverage CPG manufacturing as well as marketplace platform building. We’ve been impressed with their deep knowledge and passion for the space and are excited to work with Vince and Matt to support PartnerSlate’s growth.?

If you are a contract manufacturer or food/beverage brand that is looking to grow your business, please reach out to [email protected] for more information on their platform.

Impact and Thesis Fit

ResilienceVC invests in embedded fintech models that drive resilience for all Americans, including the small businesses that are currently dramatically underserved by the US financial system. We believe that fintech embedded in other core services, can drive real financial resilience while driving better margins and scale for companies.

PartnerSlate is an ideal fit for this thesis. The company is serving a significantly underserved group: a majority of PartnerSlate’s customers are small businesses with less than $1M of annual revenue. Additionally, approximately half the brands on the PartnerSlate platform are woman or minority owned and one-third of their projects are plant-based or healthy products.

Partnerslate is using embedded fintech innovation to build resilience for these customers by providing a more reliable and robust source of new revenue. The majority of the 33M+ small businesses in the US say they lack access to the credit they need to effectively operate and grow their businesses. By integrating working capital financing for small businesses into the PartnerSlate platform, the company is able to reach emerging food and beverage brands with a critical lending product alongside manufacturing support. This drives the brands’ ability to get their products to market and generate revenue, building true resilience.

About ResilienceVC

ResilienceVC is a venture firm investing in embedded fintech startups that build resilience for users and deliver returns for investors. The firm invests in seed-stage startups where fintech integrated into core services and channels plays a key role in helping consumers and small businesses thrive. Founded by Vikas Raj and Tahira Dosani, the ResilienceVC team has deep experience in seed stage fintech investing and has supported over 75 innovative and impactful fintech startups. We use our extensive knowledge of the sector and of early stage investing to identify and support the next generation of resilient fintech entrepreneurs.? Learn more at resilience.vc.

If you are an embedded fintech entrepreneur looking for capital or support please reach out via our website or email Tahira or Vikas.?