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Thursday, Dec 7, 2023

Bevz Raises $3 Million

Bevz Inc., a Santa Monica-based provider of software used by liquor stores and convenience stores, is accelerating its operations with $3.1 million of new seed funding. After initially launching as a delivery app for liquor stores in early 2020, co-founders Jason Vego and Victor Grayr soon found a common issue among store owners: they weren’t properly monitoring inventory or updating delivery apps with current product availability.

“What we’re starting to see is there’s so many different, unique items that customers are looking for that the stores were either running out of it or should have had it and just didn’t know if they did or did not,” Vego said. “It’s literally losing business on items (stores) should have had.”

Bevz shifted its operations and is now software as a service platform offering business-to-business tools to store owners, with Vego as its chief executive and Grayr as vice president of business development. Vego said its all-in-one system lets clients adjust prices or availability for a product and have these changes automatically updated across GrubHub Inc., Uber Eats, Postmates and DoorDash Inc. The company said it has about 1,000 store clients that are tracking inventory and accepting or reviewing delivery orders through Bevz. Local clients include Bobby’s Liquor Store in Arlington Heights and Colony House Liquor in Malibu.

“A perfect world is (stores) use our system to order a product, like Pepsi,” Vego said. “The system knows when it arrived, uploads it into their point-of-sale, uploads it into all their e-commerce and delivery apps … hopefully they never sell out, but if hypothetically someone just bought a bunch in one day, it turns it off, and then everyone’s connected.” 

Bevz is currently focused on serving independently owned stores and small chains but has fielded inbound interest from larger franchises, and Vego said it’s “starting to explore what that might look like.”

“We find the value isn’t fully there when the systems don’t talk to each other,” Vego said. “That’s kind of the core problem in and of itself … we’re trying to become the full operating system for liquor stores and convenience stores.”

Vego said that profits are notably better since its pivot to being an operations manager as opposed to a delivery application. Bevz’s old business model was based on revenue share without any subscription income from users, and Vego said profits in 2020 were “negligible” after expenditures like paying drivers.

“Today, the consistency around SaaS is great, and then the more stores we have, the better our advertising partnerships and other things work,” Vego said. “(Profit) is becoming more meaningful; I don’t know if we’ll hit profitability necessarily next year but we’ll be on the cusp of it … the new business model works much better.”

Jason Vego

Clients pay a monthly fee of $119 per month, though Bevz offers deals and discounts, such as when a small chain signs up multiple stores. Vego said that one goal as Bevz grows is to keep this SaaS fee low, with the hope that its revenue can come from partnerships with big brands and distributors rather than the stores. Two of its current brand partners, Southern Glazer’s Wine and Spirits of America and the Republic National Distributing Company LLC, are among the largest alcohol distributors in the U.S., and brands can pay Bevz on a monthly basis to advertise their products to store owners. Platform integrations include DocuSign Inc., Plaid Inc., Stripe Inc., Twilio, Zendesk Inc. and Salesforce Inc.-owned Slack Technologies LLC.  

Bevz has been involved with three different incubator programs. The company completed the Preccelerator Program, a Santa Monica-based accelerator of early-stage startups, in 2021 and currently works out of its offices. It previously graduated from the Techstars accelerator, which provided Bevz with $120,000 of funding, and from venture firm Stage 2 Capital’s program, which invested $100,000, along with follow-on investments in Bevz’s subsequent funding rounds.

With its fresh seed capital, Bevz is focused on expanding its team and client reach. About 70% of its business is in California, according to Vego, and the company wants to hire sales associates in other states to assist with national growth.

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