Why We Invested in Prado
November 20, 2022
According to a recent Forrester report, the Food and Beverage industry will be the fastest-growing online sales category during the next several years.
Jon Carter got the idea for Prado while serving as the CEO of Snap Kitchen, an Austin-based prepared meal service now distributed by Whole Foods. He saw the next generation of food innovation heading toward subscription models but felt the industry lacked the infrastructure to pull it off profitably. He recognized that pre-packaged meal companies currently have to use 3-5 different platforms (e-commerce, subscription add-on, POS, procurement, delivery) to run their businesses, and he had a vision to unify all of these processes into a single, user-friendly platform.
What is Prado?
Prado is a platform that empowers meal prep brands to run and grow their businesses as easily as Shopify merchants selling t-shirts.
Prado simplifies the complexities of running a prepared meal business - whether your storefront is virtual, physical, or a hybrid of both. It’s all-in-one platform supports multiple functionalities out of the box. Unlike legacy platforms such as Shopify, you don’t need any developer resources to manage your shop. It’s simple enough for a business manager to use and update while maintaining the elegance of an expensive web application.
Exciting Product Features:
- Unified Shopping Experience (i.e. omnichannel, one-time and recurring)
- Flexible Inventory Management for Perishable Goods
- Customer Management
- Customer Insights and Data
- Integrated Marketing Automation
- Custom Order Packaging
Who are Prado's customers?
Prado’s current strategic focus is on meal prep businesses. Other customers include farmers market vendors, quick service restaurants, indie grocery stores, grab-n-go retailers, and short shelf-life consumer packaged goods.
What’s is the problem that Prado is solving?
First, there is a uniqueness to food & beverage businesses, like expiring inventory and the need to connect front end orders to back end production, that is very different from selling non-perishable goods such as t-shirts or sunglasses for example.
Second, in the food and beverage industry, acquiring better forecasting data for procurement leads to better sales. At the moment, many prospective customers attempt to do this by hacking together several different platforms (i.e. Toast for POS, Shopify + Bold for e-commerce, Microsoft Excel for inventory and production, etc.) and none of them are ideal. This type of implementation creates a choppy UX that causes major issues in inventory planning and product fulfillment.
Lastly, smart businesses in this category recognize the value of subscriptions. Having guaranteed orders on a reliable schedule is essential to growth and the opportunity that Prado is tackling. You get a higher customer lifetime value, more sales, and more predictability, which enables you to be more effective and efficient on production. As one Prado customer told us:
“We can’t use Shopify because we do last-mile delivery, are subscription based, and need the ability to pick delivery vs. store pickup. Shopify is built for shipping businesses and not delivery businesses.”
Why we love Prado’s founders, Jon Carter, CEO and Josh van Eikeren, CTO?
Jon knows what scale looks like. He was SVP and GM of e-commerce at Live Nation for many years, and then CTO and CEO of Snap Kitchen, which is a specialized form of online commerce with a very similar dynamic. Prado’s CTO, Josh van Eikeren, is a serial entrepreneur, having sold one company and acquired another (clarify). We were impressed by his combo of practical business sense and strong technical competence. Josh and Jon together presented a powerful product/tech combo - similar to what we saw with founders Matt and Sean and Boulevard.
What ultimately did we invest?
The Prado investment opportunity is compelling because it’s a bet on sharp and dynamic founders with great founder/market fit as well as the potential to capitalize on an underserved market with few viable incumbents. Jon is someone you want to back - he has a clear vision for what he’s building and how he’s going to get there. He’s spent a lot of time in the space formulating a thesis on why this is a solution that can achieve wide adoption. What he’s already built with limited resources is impressive - it’s a good product that reliably serves a large enterprise customer with millions in GMV.
Where do we see Prado’s growth coming from?
The next generation consumer cares about having a direct relationship with brands and that includes food. It’s no longer about buying the product that General Mills advertised at the supermarket. Aspiring brands need to engage with their customers directly and customers want to engage directly with their brands. That’s a fundamental change from the way the F&B industry has worked historically which has been very focused on grocery and channel.