How Arryved will use $21M raise to expand market share

BOULDER — Loren Bendele joined Boulder-based Arryved Inc. as CEO in May, just in time to lead the Boulder-based point-of-sale-technology company as it uses new capital to expand within the craft-brewing niche and enter other sectors.

Helping Bendele’s efforts will be $21.26 million in new capital, raised in a round led by Tribe Capital Management LLC, based in San Francisco, and Boulder-based Foundry Group, with some earlier investors also contributing.

The funding brought Arryved’s total fundings to $27.76 million, including $6.5 million raised in 2017, 2018 and 2019.

Arryved has focused almost exclusively on the craft-brewing sector, providing point-of-sales systems. The company’s performance during the past year and a half — doubling its customer base since the beginning of 2020 — helped lure Bendele, a veteran of Savings.com Inc. and other technology companies, to join the team.

But it was the company’s founder and former CEO, David Norman, that really brought Bendele on board.

“I’d gotten to know our founder about a year ago, and he let me know that he was thinking about changing roles so he could focus on the technology and the product, which is really his passion,” Bendele said in an interview with BizWest, “and bringing someone in to run the business.”

Bendele said that Norman builds “super-authentic cultures focused on their customers and is literally one of the best engineers in the world. So I was inspired by him. That’s what really made me want to join the company.”

Norman has shifted to chief product officer and will continue as chief operating officer and chairman of the board.

“Our growth over the past year has been fueled by innovation and a focus on helping our merchant partners navigate the changing landscape of the pandemic. Looking ahead to the future, this move ensures I’m free to focus on our customers, our product and the continuous innovation that helps our merchants better serve their customers,” Norman said in a prepared statement in May.

Bendele said he examined Arryved’s financials and market share and “saw how dominant they were in the craft-brew space and how well-loved their products and support and team are. People love Arryved. I stopped into a bunch of Arryved’s customers locally, and universally, the reaction I got when I asked about the point-of-sale system or the company was a huge smile, followed by, ‘They’re amazing, they’re great.’”

Pivot during COVID

One reason for that can be found in Arryved’s ability to pivot — and help its customers pivot — during the COVID-19 pandemic.

“A lot of what we did was because of COVID,” Bendele said, noting that decisions were made before his time with the company. 

COVID forced bars, restaurants, craft brewers and other establishments to close for in-door dining or other service, or open on a limited basis, devastating Arryved’s core customer base.

“Right when COVID hit, all of our customers are craft breweries, and they’re hospitality. So we knew right away that this was gonna be bad, and we had to prepare,” Bendele said.

Some of Arryved investors expected the company to lay off people, Bendele said, but Norman and the leadership team took a different approach, with managers taking pay cuts. They also consulted with customers on their needs, and developed new technology, within a couple of weeks, to help them generate revenue.

Arryved worked with customers to determine how to pivot their businesses to take to-go orders, providing them with websites integrated with the point-of-sale system. A customer can go to a craft brewer’s website, access the menu, place an order and pay  for an order, with the order instantly forwarded to the kitchen for fulfillment.

Arryved Online provides customers with the online storefront, enabling breweries and restaurants to secure orders for pickup and delivery. OpenTab offers a contactless point-of-sale option for in-person guests.

“We developed and worked closely with our customers to help them get their businesses to survive and thrive during coronavirus, and we just got a ton of goodwill from our customers for that reason,” Bendele said. “Many of them told us they’re still in business because of us, because of what we did with our products and systems and offering to quickly pivot to-go, to quickly pivot to enable people to ship beer to their friends and family, and focus on doing all of the things they could still do even during coronavirus.”

Arryved’s performance also helped it secure the $21.26 million in new funding.

“Arryved has continued to outperform projections, even during the coronavirus pandemic,” Ryan McIntyre, managing director and co-founder at Foundry Group, said in a prepared statement. “We’re thrilled to participate in this latest round of funding and to continue to support Arryved’s impressive growth in such a vibrant and attractive market.”

Bendele said the company will use the new capital to accelerate growth within and beyond craft brewing. One goal is to grow its market share within the craft-brewing sector from the current 12% to 30% to 50%. The company also will expand into other market segments, such as the broader hospitality industry.

“We’ve got the right engineering team, the right product team and the right support team to be one of the top players in the space,” Bendele said.

He said the company intentionally focused on craft brewing initially, which accounts for “almost all of our business today.”

“It was a brilliant strategy to focus on just one industry that’s a well-networked industry, where everybody knows each other and they talk to each other,” he said. “We’ve benefited quite a bit from that word of mouth.”

Bendele said the company’s reputation with customers has been key to its success.

“That’s the brand that we built, that’s the brand that the company has earned,” he said. “Now it’s about growth, making sure we grow responsibly, so we continue to take care of all of our customers the same way we have since Day 1.”

He said the company will invest in sales, customer service and engineering. 

Arryved employs 60 people at its headquarters at 3002 Sterling Circle in Boulder, with about 15 job openings on the company’s website.

“To be determined … exactly how many we’re going to hire and how we’re going to scale,” Bendele said. “We’re working on that internally to make sure we’ve got the right people in place to achieve all of those goals. We’ll definitely continue to hire.”

Bendele said the company also will explore its space needs as growth continues.

“It’s [the current location] big enough for us today, it’s probably not big enough for us tomorrow, so we are looking at other options,” he said.

© 2021 BizWest Media LLC

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