Lettuce raises $2.1M to prove the viability of SMB software

By Michael Carney , written on October 15, 2012

From The News Desk

Formerly the uncool, oft-forgotten category of the startup ecosystem, enterprise has gotten its groove back. Trends like the accelerating shift to the cloud and the consumerization of IT have made it both popular and profitable for entrepreneurs to develop solutions for businesses, and for investors to back them. One sub-segment of this market that still has many investors leery is the small- and medium-sized business (SMB) market, which despite its massive size, typically requires more block-and-tackling per dollar of profit than does whale hunting.

Los Angeles-based Lettuce is bucking this trend, today announcing $2.1 million in seed financing from Crosscut Ventures, 500 Startups, Launchpad LA, Baroda Ventures, Zelkova Ventures, Double M Capital, Clark Landry, Tom McInerney, and other strategic investors. [The picture above is what I imagine the founders looked like when they envision that big pile of green.] 

Lettuce offers a SaaS solution for the the most troublesome part of SMB life: Order management and fulfillment. Its platform connects the backend systems of its clients, including CRM, accounting, inventory, payment processing, and shipping, to eliminate the need for duplicate data entry and thereby reduce the time to process each order, often by a factor of ten or more.

The company’s core solution takes two forms, a Web-based inventory and order management system known as Lettuce Hub, and an iPad-based mobile order capturing and sales application for field sales reps, Lettuce Mobile. The product is aimed at manufacturers, wholesalers, distributors, and ecommerce retailers that service high volumes of orders, which often require rapid turnaround.

As I described previously upon the company’s launch, Lettuce was born out of the frustrations of its co-founder and CEO Raad Mobrem, who previously owned a successful small business selling dog toys. The problem was, the more success he found, the more hours he was personally spending each day processing orders, with all the repetition and wasted effort that typically plagues SMBs.

Mobrem quickly realized that the available software tools were ill-fitted for the size and stage of his business, so he and his co-founder and CTO Frank Jones set out to hack together an alternative for themselves.

“We knew we were onto something as soon as we processed our first order in seconds and optimized time spent by over 95 percent,” says Mobrem.

The pair’s early prototype was so effective that it began catching the attention of Mobrem’s then customers and vendors, and Lettuce began receiving orders before it was even a business or had a commercially viable product.

Realizing that they were sitting on a massive opportunity, the founders spent the next year polishing their product and honing the business under the tutelage of the LaunchpadLA accelerator, before launching publicly in August. In the 45 days since, the company has been onboarding clients as fast as it can handle them and has already processed over $2 million in orders for its users.

The platform launched with a range of software integrations in core categories, including Quickbooks (accounting); Stripe and (credit card processing); UPS, FedEx, and USPS (shipping); and Salesforce via private beta (CRM). In the weeks since, it has rolled out a beta version of its Shopify ecommerce platform integration which is currently available to users by request only. Next on the product roadmap is Magento, which Mobrem says will be launching soon.

The early feedback from customers and investors suggest that Lettuce is pulling all the right levers and is poised to extract soon. The next step will be using the new pile of cash to scale a sales the team in both sales and engineering to meet the increasing demand. Just don't bother telling Mobrem that the SMB market isn't a viable one. An entrepreneur at his core, he can smell the opportunity, and anyone who knows him will tell you he's been charging relentlessly to capture it.

[Image source, ThirdEyeMom]