Supie

Supie is disrupting the $22bn New Zealand retail grocery market and is now targeting to raise $3m of growth capital.

Minimum investment: $1,500 NZD

$3,918,604
Offer live
$1,081,396 still available
$3,918,604 Offer live
$1,081,396 Still available

Further detailed information is contained in the Supie Information Memorandum 2022

Supie is a rapidly growing and disruptive online supermarket that is on a mission to deliver a better grocery alternative for every New Zealander. Shopping for food online is not new - what is new in New Zealand is an online-only fulfilment business model that capitalises on new ways of doing things.  Supie is already in the market, gaining traction every day.

New Zealand supermarkets have not evolved or innovated due to the lack of competition. Supie brings a new model of grocery shopping online, replacing in-store habits with digital experiences for consumers, while delivering game-changing differentiation for suppliers.

Launched in 2021 by Sarah Balle, who saw an opportunity to provide a supplier-friendly and customer- centric approach to grocery retailing. Supie offers a full grocery range of both every-day and premium products at the value that New Zealanders always seek. The company currently delivers to customers’ doors direct from its Supie Hub based in Auckland, utilising its custom technology and Supie System.

Supie’s wide selection of products are sourced from selected suppliers, big and small, local and international, that tick customers’ boxes in terms of dietary, lifestyle and sustainability requirements so that consumers can shop the way they eat.

The grocery industry in New Zealand is a $22bn industry and has a high degree of market concentration, with the market dominated by two major players. The online portion of the grocery retail market is rapidly growing, offering an opportunity to grab market share. 

NZ Post indicates online sales of specialty food, groceries and liquor increased by 47% to $1.3bn between 2019 and 2020, against an overall sector sales increase of 10%. Supie expects that the online grocery retail market will reach $5.5bn by 2025, with 450,000 households forecast to regularly purchase groceries online within the next 5 years.

Supie has quickly gained thousands of customers, delivered tens of thousands of orders, and hit an annualised revenue of $6.5m.

This growth demonstrates the scale of the opportunity and has validated Supie’s product-market fit.  Supie is targeting revenue of $24m in FY2023 and expect to be profitable in FY2024, with a forecast revenue of $78m.

The forecasts reflect the opportunity in the market supported by the recent ComCom review of the supermarket landscape in NZ which has placed regulatory pressures on the industry.  This has created a clearer path to competition that Supie can capitalise on.

Sarah and her team, with the support of her Advisory Board, are well placed to deliver on Supie’s growth strategy of Auckland expansion, by increasing weekly orders through a digital-focussed strategy, enhanced customer experience, hiring key roles and amplifying their sustainable impact model.

Supie is disrupting the New Zealand grocery market and is now seeking to raise up to $5m of growth capital to fund technology development, marketing initiatives to drive membership growth and working capital to continue to fund expansion, inventory, people and operations for the next 18 months.

People

Core Team

Sarah Balle - Founder & CEO

Sarah is a qualified Chartered Accountant and has an MBA. She grew up in Pukekohe and is part of the one of the largest vegetable growing families in New Zealand. Her career spans across several industries, and a number of large and small organisations, including Fonterra, 2degrees, and Nando’s. Her expertise is in implementing innovative solutions and technology and process improvements to achieve operational efficiencies at the same time as providing exceptional customer experience outcomes. Prior to Supie, and as part of her role as CFO for Collective, Sarah ideated and implemented the ASB Tennis Classic hospitality order app which led to significant operational, financial and customer experience improvements. Sarah is driven to make a positive impact on all Kiwis - customers, suppliers, investors, and all other Supie stakeholders.

Marco Marinkovich - Head of Technology & Marketing

Marco has over 15 years experience in solving problems with creativity and technology. He has founded and is involved with start-ups across a broad range of industries operating in the mobile, SaaS, virtual reality and e-commerce space. He has worked with some of the world’s most recognisable brands such as Heineken, DHL, Energizer, Starbucks and 2degrees, creating and delivering globally recognised marketing campaigns. Marco is delivering a tech and marketing strategy that has not been seen in the NZ grocery industry.

Luke Benefield - People & Culture Manager

Luke’s career has seen over two decades working in the hospitality industry. Starting out on the tools and working his way through the ranks to management before becoming a Hell Pizza Franchisee. After joining Nando’s, Luke spent many years in operations in both Australia and New Zealand, before moving into Human Resources. Luke’s passion for People & Culture and the backcountry outdoors, has seen him become an expert in his field, including as a speaker at DisruptHR. At Supie, Luke is delivering an HR strategy with a difference.

Thomas Stevens - Supply Chain Manager

Tom has over 10 years experience in Food and Beverage industry, most recently coming from Lion Breweries where he began his career in Supply Chain. He has had a number of roles from demand planning and supplier management to national management of inventory. Tom is the driving force behind Supie’s lean supply chain.

Olwyn Morgan - Operations Manager

Olwyn has held several operations management roles, leading large teams, in the events and hospitality industry, and more recently at Foodbox. Prior to Supie, she worked at Turners & Growers in the produce purchasing and sales team, so is well-versed in the world of fresh produce. Olwyn passionately leads the Operations and Order Fulfilment teams to deliver the freshest groceries to Supie’s members.

Cahan Waterson - Customer Manager

Cahan has a background in technology and customer experience, most recently at foodbox provider, Woop. Cahan, together with the CX Team, are providing Supie members with an exceptional customer experience.

Olivia Sutton - Accountant and Impact Lead

Olivia is a member of the accounting team, having previously worked at Deloitte. She leads the implementation of Supie’s Impact Model and sustainability projects.

Advisory Board

Ben Kepes - Chair of Advisory Board

Ben has served on the boards of a number of non-profit, privately held and listed companies in New Zealand and the UK. He has won several accolades including being a recipient of the Sir Peter Blake Leadership Award in 2016 and being recognised as a Chartered Fellow of the New Zealand Institute of Directors in 2021. Ben has been an investor in a large number of early-stage technology start-ups across three continents and has had successful exits to listed and privately held companies in Canada, the US, and the UK. He has served on the advisory boards of a number of technology startups in New Zealand, Australia, the US, and the UK.

Hadleigh Ford

Hadleigh was an early investor in Supie and an advisory board member. He is the founder and CEO of SwipedOn, an office software solution used in 8,000 workplaces globally. SwipedOn exited in 2018 and is now publicly listed in the UK. Hadleigh has facilitated revenue growth of over 500% in his post acquisition tenure and expanded operations to over 70 countries. An investor in a number of early/late stage ventures, holding chair and advisory positions. He acts as a mentor for startup accelerators in Australasia and the UK.

Ben Scott

Ben joined the Supie Advisory board alongside Ben Kepes and Hadleigh Ford at Supie’s launch in June 2021. Ben is currently Director of Product Management for UBCO Utility Electric Vehicles. Ben’s experience includes co-founding SwipedOn alongside Hadleigh Ford, which successfully exited to SmartSpace Plc (UK listed) in 2018. Ben has worked in and around the NZ technology startup scene for 10 years and is an active mentor, advisor and angel investor.

External Advisors

Supie is the disruptive force to the grocery industry, an online supermarket, creating a better grocery alternative for all Kiwis. Supie leverages both emerging buyer trends and technological opportunities to more efficiently and effectively fulfil shoppers' needs, with their personalised shopping experience - both in terms of the ‘main’ grocery shop and artisanal requirements.

Supie is also responding to the growing resentment that suppliers feel with the current supermarket incumbents which has allowed the business to build a supplier portfolio of significant scale. Supie wants to encourage Kiwis to buy more locally produced products and ultimately support the New Zealand food system.

Supie Offers:

  • Personalised shopping experience
  • Fairer pricing to consumers
  • A large range of both everyday pantry staples and artisanal products
  • Fairer pricing for suppliers
  • A Better for the planet solution with a ‘no waste’ model

Supie is membership-based for two key reasons – firstly, to ensure customers numbers are managed during scaling so that the business can sustainably grow while retaining customer experience levels, and secondly, to provide insights in the engagement of potential customers.

There are currently two membership options:

  • Supie Free members get access to products, fairer prices and a seamless grocery shopping experience with a flat-rate delivery fee;
  • Supie+ Members pay an annual $99 fee and get access to all of the above, plus free delivery, product samples, and 2-10% Supie cashback on all products purchased.

Supie currently ranges more than 6,000 products, with 200 new products being added each fortnight.  The range has been developed to remain familiar to customers to encourage them to easily make the switch, as well as offer new products that are not available in the major supermarkets.  Whereas, the duopoly is largely restricted by shelf space available in bricks and mortar stores and increasingly supporting their own brands.  The product range enables customers to complete a full ‘main’ grocery shop that is also complementary to their dietary, lifestyle and sustainability requirements.  More recently, Supie broadened its range by adding beer, wine, and spirits to its online offering.

Supie’s technology has been designed to supersede the existing online model and is a critical part of their customer experience.  The key focus is on building a user experience that goes above and beyond the e-commerce model that competitors are currently offering in New Zealand.  AI and machine learning is leveraged to deliver ‘Netflix’ style customised experiences for customers. The personalised shopping experience includes suggesting and recommending products based on customer preferences, becoming more refined the more frequently customers shop.

Supie is breaking down the traditional barriers of supermarkets to suppliers, allowing incredible smaller brands to be able to sell on the Supie platform.  They have built a supply partner community of significant scale consisting of more than 300 supply partners, representing over 600 brands, and have another 100 potential suppliers on the waitlist.  They source from selected suppliers, big and small, to connect their customers to their favourite local and international brands.

Customers

Supie’s customers are regular Kiwis looking to save time, save money, and enjoy a personalised grocery shopping experience. They care where their food comes from, how it is produced and who is making it. They are driven to improve their health and their impact on the planet.

High level demographics include;

  • Auckland-based
  • 25-50 years of age
  • Shop’s online
  • Grocery purchaser
  • Digitally-savvy

Supie has a database of 23,000+ members which represents an engaged audience that Supie can target to convert into customers. Of the current members, 20% have converted into customers by placing their first order. Customers are then categorised as ‘active’ and ‘non-active’ customers.  Just over 50% of customers are considered are active, with non-active customers being re-converted through 1) increasing delivery spots, 2) increasing product range, 3) improving tech and customer experience.

About 35% of customers are Supie+ Members.  The $99 annual membership fee has a payback period for customers of 6 shops, as they receive cost-savings in the form of free delivery and 2-10% cashback on all products purchased.

Operations

Supie Hub

The order fulfilment centre, aka the Supie Hub, is located at 31 Ha Crescent, Wiri, South Auckland.  At the hub produce, ambient, chilled and frozen goods go through a number of Supie’s processes from inbound management, replenishment, order picking and packing, to staging, ready for last-mile delivery. The hub currently services the Auckland market and has been set up to allow the team to remain agile and trial new operational approaches through the different levels of growth.

Supply-Chain

The supply-chain model has been constructed to ensure direct, seamless and efficient supply of products from supply partners in to the Supie Hub. The Supply Chain team manage demand and supply planning as well as inventory management to achieve minimal out-of-stocks and substitutes for Supie’s customers, while remaining largely just-in-time, reducing waste and achieving optimal inventory levels.

Suppliers

Supie has direct supply relationships with 300+ partners, representing more than 600 brands, and 6,000 products.  The Supie team onboard 200+ new products each fortnight, with a priority on products that continue to build the ‘main shop’ product portfolio for customers to ease the switch from their habitual supermarket to Supie and provide familiarity.  The secondary priority is on-boarding smaller, local food producers whose products are typically found at farmers markets and providing a seamless, direct and innovative way to reach and connect their products with new customers.

Order Fulfilment

Supie employs 40+ team members across full-time, part-time and casual contracts to fulfil customer orders.  The team is highly process and target driven to ensure efficient operations and minimise the order error rate.  Processes are continuously assessed and improved as higher order levels are achieved, ensuring that order fulfilment is operating efficiently, improving the unit economics and achieving maximum customer satisfaction.

Circular Packaging

All delivery packaging, plus soft plastics, can be returned to Supie (usually during delivery of the next order) which either is reused, recharged or recycled.  Supie has relationships with Future Post and Astron Plastics for turning soft-plastics into new products.  To minimise packaging costs and cardboard waste, Supie utilises 99% of cardboard boxes sent by suppliers as packaging for customers.

Supie uses ambient delivery vehicles for the last-mile, so developed innovative cold-chain packaging that ensures that chilled and frozen products remain at their ideal temperatures during ambient delivery.  The cold-chain box was designed specifically for Supie, using fibre insulator inserts (made from waste cardboard) in a cardboard box, meaning the boxes are fully insulated at the same time as being fully recyclable.   ECryo tiles are charged to -80 degrees, are non- toxic and are placed in the boxes, ensuring that the items remain at their food safe temperatures throughout the delivery cycle. 

Delivery

Last-mile delivery is currently handled through a partner, Freightways, who are experts in delivering from the Supie Hub to our customers, 7 days per week.  The team continue to assess and explore new approaches to more nuanced last-mile delivery requirements, including delivery from the Supie Hub to regions beyond Auckland.

Technology

Technology is utilised throughout Supie to provide a user experience that goes above and beyond the e-commerce model that competitors are currently offering in New Zealand, as well as enabling efficient operations via the Supie System.

Supie’s technology stack is a combination of technologies using proprietary systems and strategic partnerships. 

The backend application is built using .NET framework developed by Microsoft to ensure a reliable and scalable environment, as Supie continues to grow beyond today.. The frontend application is developed in JavaScript library React.js which provides efficient, declarative, and flexible web applications.

The strategic partnerships covers technology used in Supie’s AI-powered search, discovery and recommendations, the warehouse management system, payment gateway provider and cloud data storage providing comprehensive, multilayered security.

The Supie System, still in development, includes a custom Pick & Pack application that matches the Amazon-esque chaotic warehousing model, enabling the order fulfilment operation to operate lean, reduce operating cost and run efficiently.

Our user centric design process offers a superior customer experience, going beyond
‘just’ selling groceries online.

Customers with gluten allergies, vegan customers, paleo customers, and customers who only purchase local organic produce are able to find exactly what they need. The Supie brand experience online is a leading point of difference to create immediate value and encourage long term loyalty. With a clear content strategy, thoughtful interaction design, and appropriate user interface design it become critical for the tech’s ability to fulfil these core user needs.

We focus on consumer online habits and buying behaviours outside of groceries by identifying points of differences and learnings form multiple platforms. We utilise user learning mechanics that create value for the consumer and, understood content methods that create desires and wants.

Market Opportunity

New Zealand has around 1.8 million households all requiring food and groceries, according to Stats NZ. According to the ComCom report, the industry size is currently $22bn per year and is anticipated to grow modestly, in line with ongoing population growth.

New Zealand supermarkets have not evolved or innovated due to the high degree of market concentration in the industry. In fact, Foodstuffs South Island only launched online delivery in mid-2021. The market opportunity has been highlighted in the media, particularly with the Commerce Commission’s review of the supermarket industry and the regulatory pressures now placed on the duopoly.

Shopping for food online is not new there are plenty of ways to go about acquiring food without stepping foot outside of your house such as UberEats , My Food Bag, GoodFor, and iShop by New World to name just a few.

Online grocery shopping is rapidly growing. Nielsen data shows Pre-Covid19, only 4% of groceries were purchased online in New Zealand, a significant growth of 37% on the prior year. Since Covid19, online grocery shopping has become increasingly important as kiwis stay home and stay safe, which has resulted in soaring demand, with growth of 47% experienced.

This growth has resulted in more people understanding and feeling comfortable with online grocery shopping and has been the catalyst for broader changes in buyer behaviour. Still, online grocery shopping in New Zealand is underdeveloped compared with other countries, with 30% of UK households purchasing groceries online.

Supie anticipates that New Zealand will continue to experience rapid growth in the online grocery market, offering an opportunity to grab market share as the incumbent retailers build their e-commerce offerings and order fulfilment solutions.

  • $22 billion current size of the grocery retailing market
  • 22% of households will regularly purchase groceries online within the next 5 years
  • $5.5 billion size of the online grocery retailing industry by 2025

Competitive Landscape

Supie is in the market today, gaining traction everyday. Existing players are locked into big-box retail approaches and franchise models and are unable to adapt to the very real opportunities in the sector. Meanwhile on-demand and meal-kit providers haven't got the brand story or product range to deliver a full grocery shop to consumers.

The Duopoly

Foodstuffs and Woolworths dominate the grocery retail space, predominately through bricks and-mortar stores. Their brands, including New World, Countdown, and Pak n Save, now all have online platforms with delivery and click-and-collect options, these are all fulfilled from individual stores rather than a central distribution centre. An important point of difference is the lean operating model that Supie  constructed which incurs less overheads compared with bricks and- mortar retailers, and simply, the dedicated focus to online retailing. In comparison, Supie are also able to market a significant range of products, including small, local suppliers, whereas the duopoly are restricted by shelf- space available in stores and supporting their own brands, such as Select and Pams.

Online-only Grocery Retailers

Pre-covid, there were few competitors in the online-only grocery retail space in New Zealand, such as PandaMart, Food Warehouse and Family Pantry. More recently (in response to Covid-19) B2B food service providers have ventured in to the B2C online space, including Service Foods and Bidfood, and bulk-buy business Container Door launched a grocery site, The Honest Grocer, which has recently closed. While these business offer similar components to Supie, to find genuinely comparable competition to the Supie model you need to look overseas to Ocado (UK), Picnic (NL) Boxed (US) and Thrive Market (US).

Specialty Retail Outlets

Specialty bricks-and-mortar stores, such as Farro Fresh, GoodFor and Huckleberry’s, also have online platforms. Their customers seek premium products and are willing to pay premium prices. Supie has a different proposition, offering a full range of both premium and everyday products at the value that New Zealanders always seek. With their lean business model, Supie doesn’t have the overheads of these physical specialty retailers.

Subscription Food Boxes

Supie may be seen as a competitor to My Food Bag, Woop, Hello Fresh or Oooby in that they deliver food to doors, however we see them as complementary offering rather than a competitor. These offerings focus on dinner meal-kits or food boxes, with consumers still requiring a weekly trip to the supermarket to get their essentials. While some of these subscription boxes are starting to offer other food products alongside their meal kits, Supie offers the same convenience but with a full grocery solution for their main weekly shop.

Strategy

Supie launched in the Auckland region in June 2021 and is the leading online-only supermarket alternative. The business retails grocery products (ambient, chilled, frozen and fresh) and has recently introduced beer, wine and spirits to the range after obtaining their liquor licence in March 2022. Supie has $6.5m in annualised revenue, which continues to grow.

Supie has a database of over 23,000 members.  The membership database is growing daily and represents an engaged audience that is the target for conversion into future active customers as brand awareness, product offering and delivery slots build.  There is a time lag between membership sign up and placement of first order representing their conversion to a customer.

In 12 months, Supie has developed the product offering from 2,000 SKU’s to over 6,000, with a capacity to add 200 new products to the range each fortnight.  The number of SKU’s currently ranged is comparable to a traditional bricks and mortar supermarket.  As an online-only supermarket with no public access, the business has the ability to develop a significantly larger range, including products from small, local producers in addition to the large multinationals.  The target product range is to provide a competitive selection of products that allow customers to complete a full-main grocery shop.

Growth

The focus in the immediate future is to grow the number of weekly orders by increasing members and building advocacy to encourage repurchase within Auckland to continue to achieve density in terms of marketing spend and delivery, before expanding outside of Auckland.

Auckland

Auckland expansion is based on increasing memberships, driving conversion, and growing customer retention.  The key metric is weekly orders, which formularised through the following metrics:  members; percentage of members converted to customer through placing a first order; and, percentage of active customers.

Supie expects to average 3,000 orders per week in FY2023, with a forecast revenue of $24m.  Beyond FY2023, Supie budgets to reach the capacity of the current order fulfilment centre averaging 10,000 orders per week and delivering profitability.  To achieve this, the marketing team is focussed on delivering the strategic funnel – aka “Supie’s secret sauce”.

Since the stabilisation of Covid19 and its impact on delivery, Supie plans to increase the number of delivery slots offered to members from one to three (morning, afternoon and evening), to provide a comparable offering to the traditional supermarkets and providing consumers with the ability to easily switch to Supie for their main grocery shop.

The current average order value is $138 including GST. Being an average, this includes first orders which are smaller in dollar value than repeat orders, likely due to the ‘trial’ nature of the first order. However, in time the average order value is anticipated to increase as the product range continues to expand.

Beyond Auckland

Delivering nationwide is the goal once Auckland density has been achieved – and with more than 1,000 requests to take Supie beyond Auckland, the demand exists.  Supie will be trialing delivery to Wellington and Christchurch from the Auckland Supie Hub in the second half of 2022 as part of their contract with Ko Ngā Kai Whai Painga delivering 2,400 grocery boxes. 

Marketing

Supie will amplify what they are already successfully doing, split across marketing services and media spend (digital media and KOL’s) to attract and retain customers. The team are obsessively monitoring data to maximise marketing and acquisition spend.

Brand Awareness + Acquisition

Supie has a clear brand story that is delivered through modern content across all digital channels. The team are focused on delivering a digital grocery experience that remains familiar to customers but utilises emerging trends outside of the grocery industry to elevate their content strategy.  The key channels that deliver this include: brand campaigns, social media, retargeting, KOL and affiliate marketing, and PR, with the ultimate outcome to get people to ‘try Supie’.

Loyalty + Retention

The retention strategy is focused on delivering exceptional customer experience. Supie optimises the digital funnel system, with continuous EDM campaigns and utilising a compelling content strategy that shares the mission and values, speaks of product provenance, and engages with customers to come on the Supie journey.

To increase weekly orders the major focus is to improve their customer experience at every touch point. This includes expanding the product offering, increasing the number of delivery slots and ensuring a frictionless shop from order to delivery, together with exceptional customer service. The tech-driven personalised shopping experience provides recommendations to customers based on their preferences, which is constantly refined the more consistently they shop. This aims to drive loyalty and repeat purchasing behaviour as the customer derives more value from the shopping platform.

Memberships are another way Supie encourages repeat purchase, as customers upgrade to Supie+ they reap the rewards such as free delivery, 2-10% cashback on all products purchased, and product samples.

Supie Partners

Supie provides marketing services to supply partners and is an additional revenue stream.  With proven results after successfully completing two marketing campaigns with Fonterra, the marketing team will collaborate with more suppliers to connect their brands with the active Supie customer base and social followers.

People

Supie will continue to add to the team over the next 12 months, with recruitment of the following roles:

  • Supply Chain Analyst;
  • Finance Administrator;
  • Supply Partner Manager;
  • Head of Operations.

Board of Directors

Within 3 months of the raise closing, the Board of Directors will be recruited and formally appointed.  This will include the Founder Director (Sarah Balle), an Investor Director, and at least one other.

Impact Model

“At Supie, we believe New Zealanders are paying for and wasting too much food. Our tomorrow is when healthy food is accessible and affordable for all Kiwis.”

Supie is a purpose-led business with an impact model that concentrates on UN Development Goals 2 - Zero Hunger (2.1) and 12 - Responsible Consumption and Production (12.3).  The impact model provides for positive outcomes in terms of minimising food waste throughout the supply chain, improving the health of the population, improving food poverty statistics, and reducing CO2 emissions.  While Supie is purpose-led, it is still commercially driven, lending to the fact that customers now demand more of organisations beyond just product and price - they want to know the ‘why’ of the business and ‘why’ they should spend their hard-earned money with them.

Supie has recently been accepted into Deloitte’s Impact Accelerator program to further develop and embed the impact model, metrics and reporting.

The Future

Beyond delivering nationwide, the intention is to develop a physical presence through offering click and collect services across New Zealand.  Collecting groceries from a location that suits the customer (as part of their daily or weekly journey) is the future.  This could be from a community centre, marae, public transport hub, or petrol stations.  Supie’s mission is to create a better and fairer grocery alternative for every New Zealander - meaning that the business will keep innovating until every Kiwi can access healthy, affordable food.

To deliver the growth forecast in future years, the goal is to develop an automated fulfilment centre with the capability of processing 70,000 orders per week.  The Supie Hub was set up with the intention of moving to larger premises so the fit-out is largely able to be moved to a new site - including the modular temp-controlled areas.  The current site has a 5-year lease with several options on utilising the space when Supie moves to larger premises. 

Key Metrics

Financials

All financial projections contained in this document are based on our best assessment of future financial performance and assume that we successfully raise the minimum funding target of $3m.  If more than the minimum target amount is raised, the growth strategy will be executed more aggressively by allocating more funds to technology and marketing.  The assumptions on which the projections were prepared may prove incorrect and actual results may vary significantly.

Summary Profit and Loss

Summary Balance Sheet

Summary Cash Flow

Commentary & Assumptions

Profit & Loss Summary

  • Grocery Revenue is based on increasing orders per week, through continuous customer acquisition and retention. It is assumed in FY2024, the business will reach maximum capacity of the existing Supie Hub at 10,000 orders per week and will move into a larger order fulfilment site, being able to continue scaling and delivering beyond Auckland.
  • Grocery Gross Margins increased over FY2022 by improving the product range with high margins and reducing stock obsolescence as scale was achieved. Further increases are driven by improved purchasing strategies, improved pricing management and continued minimisation of stock obsolescence.
  • Other Revenue Streams includes revenue for membership sales, Supie Partners (marketing contributions by suppliers), and supplier subscriptions to the analytics platform (yet to be developed).
  • Order Fulfilment & Operations includes costs related to order fulfilment such as last-mile delivery, packaging, and labour, and operations such as rent, equipment and utilities for the Supie Hub.
  • Marketing spend is over 5% of revenue for FY2023, concentrating on customer acquisition. It reduces to just over 3.5% for future years in line with spend of comparative entities and as customer retention metrics improve. Return on investment for marketing spend is carefully monitored, and will be adjusted over the forecast period to maximise benefit in line with revenue.
  • Support Team are the costs of the Supie support team. These are projected to increase as new team members are recruited to execute the growth strategy. In FY2023 this includes Supply Chain Analyst, Finance Administrator, Supply Partner Manager, and Head of Operations.
  • Overheads are projected based on forecast revenue growth and will be managed as the expansion strategy is validated.

Balance Sheet & Cashflow Forecasts

  • Inventory is forecast to turnover 1.5 times per period in FY2023 reflecting the perishable nature of fresh grocery products. It is forecast to continuously increase as scale is achieved, holding on-consignment stock and optimising the just-in-time model.
  • Payables account for the mixed terms of trade with supply partners, ranging from 7 days to end of the month following invoice date.
  • Fixed Asset expenditure includes investment in technology development for the Supie platform and expansion of the order fulfilment facilities to increase order capacity in line with the growth strategy.
  • Long-Term Liabilities assumes that debt will be sought to fund fixed asset expenditure. A further equity raise may be undertaken in lieu of debt-funding.
  • New Equity represents the minimum amount of capital raised in the current funding.

Supporting documents

Offer Details

  • Company valuation

    Valuation of the company before funds are invested

    $20,000,000 NZD
  • Minimum raise amount

    The minimum amount the company is looking to raise

    $2,500,000 NZD
  • Maximum raise amount

    The maximum amount the company is looking to raise

    $3,000,000 NZD
  • Equity offered

    Equity offered at the various targets

    Min: 11.11 %
    Max: 13.00 %
  • Share price

    The cost of each share

    $11.54 NZD
  • Minimum investment

    The minimum investment amount for this offer

    $1,500.00 NZD
  • Type of share offered

    See the Subscription Agreement for details

    Preference Shares (held in nominee)
  • Offer end date

    Supie Limited may have rights to shorten or extend this end date

    30 Days
  • Investor benefits

    1 x Supie+ Investor membership (5% cashback on all products purchased, free delivery over $70, priority delivery slots, exclusive deals, and free product samples).

Use of Funds

Supie is seeking to raise $3m of new growth capital to fund the growth strategy, which is focused on:

  • Technology: to continue to develop key features to increase grocery revenue and improve member retention.
  • Marketing: to drive rapid membership growth through targeted marketing campaigns and brand awareness.
  • Working capital: to continue to fund inventory, people and operations.

If the minimum $2.5m is raised, costs will be reduced by $500k, as required. This is expected to have an impact on the forecast level of growth.

Over Subscription

If the round is oversubscribed, the board reserves the right to accept up to an additional $2m as part of this round, to a total of $5m. This equates to 20% of the equity in the business.

Valuation

The Advisory Board and existing shareholders of Supie have set the pre-money valuation for Supie at $20m. The valuation has been determined having regard for:

  • Rapid growth;
  • Market opportunity;
  • Market position and strength of the Supie brand;
  • Comparative equity raises.

Share Price

The final fully diluted share price will be determined once the round has closed, based on the actual amount of capital raised and therefore shares issued. The share price of $11.54 assumes the fully subscribed amount of $3m is raised. If the board chooses to oversubscribe up to $5m, the share price will be $11.49. The variation is due to the 4% ESOP allocation which is not determined until the round is closed.

Type of Shares on Offer

Supie Limited is offering preference shares (Preference Shares). The Preference Shares to be issued by Supie are to be issued to Snowball Nominees Limited (“Nominee”), who will hold legal title to those Preference Shares on trust for the relevant beneficial owner of those Preference Shares (i.e. the investor). Further detail on why Supie is choosing to use a Nominee is described under the heading “Nominee Shareholding Structure”.

The shareholder rights which attach to the Preference Shares are set out in the Constitution and Shareholders Agreement. A copy of these documents are available for review and you should read them carefully, along with the Subscription Agreement setting out the terms of your investment, before applying for shares in this Offer.

In summary, holders of the Preference Shares will have:

  1. The right to one vote on a poll at a meeting of the Company of any resolutions;
  2. The right to an equal share in dividends authorised by the board;
  3. The right to an equal share in the distribution of the surplus assets of the company; and
  4. The right of preference in any Liquidation of the Company

Holders of Preference Shares are also subject to drag and tag along rights (as set out in the Shareholders’ Agreement).

Nominee Shareholding Structure

We are making use of a nominee shareholding structure to simplify the share register. The Preference Shares to be issued by Supie are to be issued through the nominee company Snowball Nominees Limited (the Nominee), who will hold legal title to those Preference Shares on trust for the relevant beneficial owner of those Preference Shares (i.e. the investor). The full terms on which the Nominee will hold the shares are set out in the Nominee Deed Poll (which forms part of the Offer Documents).

In broad terms, the Nominee must:

  • Act in accordance with the relevant beneficial owner’s instructions (e.g. in exercising the voting rights attached to the relevant Preference Shares)
  • Account to the relevant beneficial owner for all proceeds from the relevant Preference Shares (e.g. dividends received)
  • Deliver notices, letters, reports, demands, offers, agreements and other documents and communications received by the Nominee to the relevant beneficial owner.

Under the Nominee Deed Poll, each beneficial owner indemnifies the Nominee against any losses, damages, costs, actions, proceedings, claims and demands that may be made against or incurred by the Nominee as a result of it holding the Preference Shares under the Nominee Deed Poll (unless the Nominee has been fraudulent or grossly negligent).

Risks and Mitigations

Disclosures

Dividend Policy

There are no current plans to return internally generated profits to shareholders, instead preferring to reinvest in the business to execute growth plans.  The directors will consider all avenues for generating returns for shareholders which may include paying dividends to shareholders at a later date.

Future Funding

Supie expects to commence a Series A capital raise in 12-18 months, with plans to raise additional capital in the future to accelerate growth plans or take advantage of other opportunities that will increase shareholder value, as they arise.

Historic Funding

Supie has received $3,686,500 in cash to date.
In December 2021 we raised $486,500 via SAFE note. The note will convert to equity immediately prior to this round at a valuation of $15m.

Exit Strategy

Supie has both e-commerce and operational functions, allowing for an attractive prospect for a range of potential acquirers.  Potential acquirers could include international grocery retailers looking to expand to New Zealand.  Equally retailers with a bricks and mortar focus looking to expand into online order fulfilment. 

Supie, as the supermarket to deliver a better and fairer grocery alternative for all Kiwis, may also seek to IPO by listing on the NZX, allowing everyday Kiwis to invest in the supermarket they shop with each week.

Entity Structure

Bevie Limited, Workerly Limited and Supie Partners Limited are all 100% owned by Supie Limited. Supie Limited operates the grocery business, Bevie Limited holds the liquor licence, Workerly Limited is the employment agency and Supie Partners Limited is the marketing arm.

Litigation & disputes

There are no past or current litigations or disputes known to the directors or management.

Related Parties

Several investors are involved in and/or are shareholders of organisations that provide goods and services to Supie. All transactions are carried out at arms length and on commercial terms.  

Remuneration

All remuneration of key executives and team members will be reviewed regularly by the board to ensure that remuneration is market driven and reflects individual performance and achievement of role objectives. Sarah Balle has historically taken her salary in ESOP. Post this round her remuneration, as approved by the board, will be paid in cash.

The company intends to create an ESOP equivalent to 4% of shares on issue post-raise.

Governance

Currently Supie operates with an Advisory Board, including:

  • Ben Kepes
  • Sarah Balle
  • Hadleigh Ford
  • Ben Scott

Upon completion of this capital raise, a Board of Directors will be formed consisting of one founder director, one ordinary shareholder director and an independent director up to a maximum of five directors.

Shareholder Communication

Investors will be updated through:

  • A quarterly business summary update (more frequently if required);
  • An annual update on the outlook for Supie, including financial statements and commentary approved by the board; and
  • Participation in an Annual General Meeting (AGM) of Shareholders.

Shareholding Structure

The following table sets out the current shareholding structure and the shareholding structure on completion of the offer maximum of $3m. The final shareholder structure may vary from this due to the actual amount raised and rounding of individual allotments.

Snowball Effect Fees

No fees are payable by investors to Snowball Effect. Snowball Effect charges the company a fee of up to 7.5% of the funds raised.


International investors

The distribution of this offer outside of New Zealand may be restricted by law. This is not intended to, and does not, constitute an offer of securities in any place which, or to any person to whom, the making of such offer would not be lawful under the laws of any jurisdiction outside New Zealand. This includes, but is not in any way limited to, Australia and the United States. It is the responsibility of any Snowball Investor to ensure compliance with all laws of any country outside New Zealand relevant to their subscription, and any such Snowball Investor should consult their professional advisers as to whether any governmental or other consents are required, or other formalities need to be observed to enable them to apply for securities pursuant to each offer. The failure to comply with any applicable restrictions may constitute a violation of securities law in those jurisdictions. The securities in each offer have not been and will not be registered under the US Securities Act or the securities laws of any state of the United States.

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Warning statement

It's crucial for you to understand the characteristics and risks of this investment opportunity. New Zealand law normally requires people who offer financial products to provide in-depth information to investors before they invest. The usual rules do not apply to offers by companies through Snowball Effect. As a result, you may not be given all the information you need to make an informed decision. Investing is risky. Some of the key risks include loss of capital, illiquidity, lack of returns, dilution, loss of key people and customers, and lack of control. You should only invest money that you can afford to lose.