Our investment in Recurrency: A $7 trillion dollar market hiding in plain sight

“Are you insane? Legacy ERPs are basically immortal!”

Thus began my first conversation with Sam Oshay, Recurrency’s founder.

After fifteen years in SaaS, I had learned one thing for sure: legacy enterprise resource planning (ERP) systems were out of reach for startups. Decades of building thousands of bespoke features had rendered legacy players untouchable. The SaaS die for ERP had been cast: the behemoths would slowly migrate their installed base to the same stagnated products, this time hosted in the cloud. Startups would be left to watch through the window.

I had said essentially the same thing to the Toast founders when they pitched me their plan to tackle legacy restaurant code.

Some days I wonder why I have a job.

On its face, ERP for distribution is the ultimate SaaS market. Distribution is a vast industry, with over 600,000 US-based companies driving seven trillion dollars in annual revenue. With the market for distribution ERP dwarfing most SaaS markets, it was too bad that the vendor lock-in was a moat too difficult to cross. 

Shrugging off fifteen years of conventional wisdom, Sam gave me a “dueling demo” of the leading ERP for distributors, side-by-side with his Recurrency product. I watched him perform a common search action in one click that took (and still takes) the legacy product seventeen. In a word, it was obvious. I didn’t need to be tortured by an ERP for years to see why Recurrency was a need-to-have. 

I pushed back—sure, he could pull off a snazzy demo, but wouldn’t it take a year for a customer to migrate to his product? 

As Sam explained, he had a plan for a seamless ERP integration, which he subsequently delivered. Recurrency was taking a lightweight approach. Rather than requiring that a customer switch their organization-wide system on day one, Recurrency would be a modularized layer-on-top, enabling immediate value with near-real-time, two-way sync.

As I learned more about Sam, I also discovered he was put on this earth to revolutionize ERP. A third-generation distributor, having spent a decade before starting Recurrency learning the ropes at his family wholesale business. Even in our first meeting, I could sense that Sam's passion, knowledge, and knack for distribution would inspire future team members, investors, and customers.

Backchannel references poured in during the call; they were as positive as I had ever seen. Sam was (and is) a unique talent focused on solving problems that have plagued his family for decades—problems which had recently become solvable thanks to a slate of best-in-class cloud development techniques, open-source tools for superior data management and search, and ROI-focused artificial intelligence (AI) applications. 

Nothing lasts forever. And after meeting Sam, I was convinced that the time was right for next gen SaaS to topple ERP. By the end of the hour, I had committed to lead Recurrency’s seed round.

A year later, after seeing Sam’s intense focus and impressive progress, Bessemer led the Series A, and I formally joined  Recurrency’s board of directors. Doubling down on Recurrency was made even easier given the cast of characters Sam has surrounded himself with. Sam has recruited many of the most talented minds in all of technology to work on a product category many consider boring. 

But, as Sam likes to say, there’s nothing boring about a seven trillion dollar customer base. 

Today, we celebrate with Sam and the Recurrency team as they announce their $22 million fundraise to modernize this category. With superlative early product traction, Recurrency’s vision—a unified intelligence and automation layer on top of all legacy ERP systems—has the potential to become the next major cloud company. Bessemer and I are thrilled to be invited along for the ride!