Portfolio spotlight: Vero Technologies revolutionizes inventory finance

Ryan Sommerville on his investment in Vero Technologies and the inventory finance landscape.

ryan-sommerville

Ryan Sommerville

Ryan Sommerville is a General Partner at Antler US and head of the firm’s Colorado office.

Portfolio Spotlight: Vero Technologies—Revolutionizing Inventory Finance

Ryan Sommerville on his investment in Vero Technologies and the inventory finance landscape.

Wholesale financing probably isn’t something I’d bring up on a first date, but it plays a crucial role in fueling the systems that drive some of Americans' most substantial purchases. From auto dealers and RVs to motorsports and agricultural equipment, inventory financing is the lifeblood of many dealers' business models. With short-term loans or revolving lines of credit to purchase merchandise for resale, this type of financing is essential for keeping the wheels of commerce turning. Manufactured goods dealers spend a staggering ~$3 trillion on wholesale purchases globally every year.

Back Exceptional Founders

In February 2020, just before the pandemic turned the world upside down, I met John Mizzi and Isaac Zafarani. Already impressed by their individual track records, I quickly recognized in them the gravitas that sets top-tier entrepreneurs apart. I’ve worked with thousands of founders and John and Isaac exuded the rare passion and determination that inspired me to strap in and dedicate the time to support them. 

I knew them both as individuals first, but it didn’t take long for them to identify each other in Antler US’s second residency. John brought his experience incubating new products for a larger software development company and understanding of the ill-served inventory finance market and Isaac brought experience navigating a startup to a successful exit after developing software to improve the GPS for autonomous vehicles. 

With their complementary skill sets, John and Isaac set out on an ambitious mission to revolutionize inventory financing. Their vision was to create a new system that not only supported existing inventory financing providers, but also empowered new players to enter the market with innovative software to address the systemic issues incumbents had overlooked.

Enter Vero Technologies

Mapping the inventory finance transaction process flow.

Vero Technologies was born and set out to tackle a twofold problem in the industry. On one side, dealers of manufactured goods struggle to secure financing for their inventory due to a lack of real competition and focus in the industry. This leads to high costs and a poor customer experience. On the other side were dealers' preferred financial services providers (e.g. community and regional banks), who desire to offer more commercial credit products but lack the know-how, scale, and resources to develop and administer inventory financing solutions.

Vero steps in to bridge this gap. By starting with the auto industry, John and Isaac launched a direct lending program that operated as Vero's wedge into the auto finance space. Over the course of Antler’s eight week residency, we focused exclusively on customer discovery and building the direct lending MVP. This approach aligned perfectly with my investment thesis, back exceptional teams with a validated problem statement by evidence that the founders can build and sell.

The Antler Advantage

I have the unique advantage as an investor of working in the trenches with my teams for 200+ hours before making a decision. This aspect of Antler's model allows investors to be on the same side of the table, working hand-in-hand with founders to support while evaluating their potential and coming to a collective agreement before we embark on the marriage to come. In Vero’s case, the investment decision was obvious—I’d be crazy not to back these founders by the lights of our thesis. 

Turns out, this was a good call. Vero has been off to the races ever since—consistently demonstrating the creativity and tenacity that I observed from day one.

Grow and Iterate

The company has received significant funding to fuel its growth, including a healthy seed round of over $3 million in the second quarter of 2022, along with a sizable credit facility to support its lending operations. Vero has already funded over $130 million in floor plan financing, serving over 110 dealers in 18 states, with the support of a top-tier team of 25 full-time employees.

Leveraging its institutional-grade operating system, Vero has expanded beyond the auto industry into other manufactured goods sectors, such as agriculture, marine, RVs, and power sports vehicles. The platform empowers dealers with improved customer experiences and provides a seamless way to secure revolving lines of credit for the products they sell. More importantly, they developed an innovative subscription BaaS (banking-as-a-service model) that offers regional banks and other lenders the opportunity to offer more commercial credit products without the need for extensive development and administration efforts.

Vero is the opportunity that investors optimize for—through all the volatility that start-up founders experience, John and Isaac have remained relentlessly focused on growth and customer success.

Beyond

An overview of the Inventory Financing competitive landscape (Source: Pitchbook)

Fast forward to today, Vero just completed its Series A funding round, further solidifying its position in the market—a testament to the confidence downstream investors have in John and Isaac. 

My thesis is to invest in exceptional founders at the earliest stage possible—far before product-market-fit is established. John and Isaac epitomize this thesis—they’re relentless founders that will break through walls to succeed. These guys have cemented themselves in the inventory finance market landscape.

It’s always day one—more to come from this team. 

If you want to build a game changing startup like John and Isaac, check out the Antler US residency.
Applications are now open for Antler’s upcoming eight-week, in-person  October 2023 residencies in Austin, Boulder, and NYC. Founders that participate have the opportunity to pitch their startup to the US Investment Committee for a $250K investment.
To learn more about Antler, drop into an upcoming AMA (registration link here). Or if you’re ready to apply, start your application here!

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