Cresicor Raises $5.6M for Trade Promotion Management

Cresicor Secures $5.6 Million Seed Funding for CPG Trade Management

Cresicor, a startup focused on trade management solutions for consumer packaged goods (CPG) businesses, has successfully completed a $5.6 million seed funding round. This capital injection will be utilized to accelerate the development of its data and analytics tools.

Addressing a Manual Process

The remotely-based company specifically caters to small and medium-sized CPG enterprises. It offers an automated system for managing trade promotions, a function currently performed largely through manual processes – often relying on spreadsheets – according to co-founder and CEO Alexander Whatley.

A trade promotion involves a company investing funds to stimulate sales of underperforming products. This could include securing prominent display placements within stores or offering discounted pricing. Whatley explained to TechCrunch that the goal is to generate future revenue through this initial expenditure.

The Complexity of Trade Promotion Analysis

Analyzing the effectiveness of these promotions is inherently complex. Companies gather promotional data from diverse sources, including retailer feeds, revenue reports, shipping records, and direct retailer data. Successfully evaluating a promotion requires correlating all of this information.

“Currently, there’s a lack of direct data integration with brands,” Whatley stated. “Our software streamlines and tracks these traditionally manual procedures, enabling companies to perform detailed analytics on promotion performance.”

Significant Market Opportunity

Trade promotion expenses can constitute a CPG company’s second-largest cost, trailing only manufacturing. Furthermore, businesses frequently reinvest between 20% and 30% of their revenue back into these promotions. With U.S. CPG sales exceeding $720 billion in 2020, this represents a substantial and largely untapped market.

“The inherent disorganization within the industry presents a significant opportunity for growth,” Whatley noted. “This new funding will allow us to expand our focus to other areas of the Profit & Loss statement, such as supply chain management and personnel costs.”

Growth and Investment Details

Founded in 2017 by Alexander Whatley, his brother Daniel, Stuart Kennedy, and Nikki McNeil while Alexander was an undergraduate at Harvard, Cresicor has experienced significant growth since securing funding in February. Revenue has increased 2.5x, and the team has expanded fourfold to 20 employees.

Costanoa Ventures spearheaded the investment, with participation from Torch Capital and a cohort of angel investors, including Matt Doka, CTO of Fivestars, and Mark Ramadan, CEO of Hu’s Kitchen.

Costanoa's Perspective

John Cowgill, a partner at Costanoa Ventures, expressed his admiration for Cresicor’s progress. He highlighted that the company had already begun acquiring customers and generating revenue prior to releasing its product, achieving near-Series A traction without external funding.

Cowgill described Cresicor as a prime example of the type of company Costanoa seeks to support – a vertical software provider leveraging data or machine learning to address a critical industry pain point.

The Evolving CPG Landscape

“The CPG sector is undergoing a rapid transformation, with emerging, digitally-native brands gaining market share from established players,” Cowgill added. “Success in trade promotion management is crucial for the next generation of brands to compete. Cresicor’s potential extends beyond trade promotions, positioning it as a core enabler for successful brands.”

Future Plans

The newly acquired funding will primarily be allocated to expanding the engineering and customer success teams to facilitate the achievement of future milestones. Whatley also intends to invest in new customer acquisition and continued software development. Cresicor currently serves clients such as Perfect Snacks, Oatly, and Hint Water.

Given the $5.5 trillion retail industry, with CPG accounting for one-fifth of that value, Whatley envisions expanding into other CPG verticals, including electronics and pet food, and ultimately broadening its scope further.

“We also aim to collaborate with larger enterprises, such as P&G and General Mills, and to develop a comprehensive ecosystem around trade promotion, extending into other areas of the Profit & Loss statement,” Whatley concluded.