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Singapore-based retail analytics company Trax raises $640M Series E led by SoftBank Vision Fund 2 and BlackRock

A group photo of Trax's co-founders, Joel Bar-El (left) and Dror Feldheim (right), and Trax's CEO, Justin Behar (center)

Trax’s co-founders, Joel Bar-El (left) and Dror Feldheim (right), and Trax’s CEO, Justin Behar (center)

COVID-19 forced many retailers and brands to adopt new technologies. Retail analytics unicorn Trax expects that this openness to tech innovation will continue even after the pandemic. The Singapore-based company announced today that it has raised $640 million in Series E funding to expand its products, which combine computer vision and cloud-based software to help brick-and-mortar stores manage their inventory, merchandising and operations. The round included primary and secondary capital, and was led by SoftBank Vision Fund 2 and returning investor BlackRock. Other participants included new investors OMERS and Sony Innovation Fund by IGV.

Before this round, Trax had raised $360 million in primary funds. J.P. Morgan acted as a placement agent to Trax on its Series E, which brings its total funding so far to $1.02 billion. Trax did not disclose a new valuation, but reportedly hit unicorn status in 2019. Reports emerged last year that it is considering a public offering, but chief executive officer Justin Behar had no comment when asked by TechCrunch if Trax is planning for an IPO.

Founded in 2010 and headquartered in Singapore, Trax also has offices in Brazil, the United States, China, the United Kingdom, Israel, Mexico, Japan, Hungary, France, Russia and Australia. The company says it serves customers in more than 90 countries.

Behar told TechCrunch that the new funding will be used to “invest heavily in global [go-to-market] strategies and technology for our flagship Retail Watch solution, as we look for ways to make it easier for retailers and brands to continue their digitization journey. More specifically, we will use the capital to accelerate growth and triple-down on continued innovation across our core vision, machine learning, IoT and marketplace technologies.”

Launched last year, Retail Watch uses a combination of computer vision, machine learning and hardware like cameras and autonomous robots, to gather real-time data about the shelf availability of products. It sends alerts if stock is running low, corrects pricing errors and checks if planograms, or product display plans for visual merchandising, are being followed. Retail Watch currently focuses on center shelves, where packaged goods are usually stocked, but will expand into categories like fresh food and produce.

The funding will also be used to expand Trax’s Dynamic Merchandising, a partnership with on-demand work platform Flexforce, and Shopkick, the shopping rewards app Trax acquired in 2019, into new markets over the next one to two years.

“Finally, we see many opportunities to help retailers along their digitization journey and will be expanding into new use cases with products we develop internally and via potential acquisitions,” Behar said.

Early in the pandemic, retailers had to cope with surge buying, as customers emptied shelves of stock while preparing to stay at home. As the pandemic continued, buying patterns shifted dramatically and in April 2020, Forrester forecast COVID-19 would cause global retail sales to decline by an average of 9.6% globally, resulting in a loss of $2.1 trillion, and that it would take about four years for retailers to overtake pre-pandemic levels.

In a more recent report, Forrester found despite spending cuts, nearly 40% of retailers and wholesalers immediately increased their tech investment, in some cases implementing projects in weeks that would have otherwise taken years.

Behar said “the pandemic made it clear the retail industry was not prepared for a sudden change in demand, as consumers faced empty shelves and out-of-stocks for extended periods in key categories. These extreme shifts in consumer behavior, coupled with global supply chain disruptions, labor shortages, changing channel dynamics (such as e-commerce) and decrease in brand loyalty forced brands and retailers to develop new strategies to meet the evolving needs of their customers.”

He expects that willingness to adopt new technologies will continue after the pandemic. For example, to get shoppers back into brick-and-mortar stores, retailers might try things like in-store navigation, improved browsing, loyalty programs and new check out and payment systems.

Trax’s Retail Watch, Dynamic Merchandising and Dynamic Workforce Management solutions were in development before the pandemic, though “it has certainly expedited the need for innovative digital solutions to longstanding retail pain points,” Behar added.

For example, Retail Watch supports online ordering features, like showing what products are available to online shoppers and helping store associates fulfill orders, while Dynamic Merchandising lets brands find on-demand workers for in-store execution issues—for example, if new stock needs to be delivered to a location immediately.

Other tech companies focused on retail analytics include Quant Retail, Pensa Systems and Bossa Nova Robotics. Behar said Trax differentiates with a cloud-based platform that is “extensible, flexible and scalable and combines multiple integrated technologies and data-collection methods, optimized to fit each store, such as IoT-enabled shelf-edge cameras, dome cameras, autonomous robots and images taken from smartphones, to enable complete and accurate store coverage.”

Its proprietary computer vision technology was also designed specifically for use in retail stores, and identifies individual SKUs on shelves, regardless of category. For example, Behar said it can distinguish between near identical or multiple products, deal with visual obstructions like odd angles or products that are obscured by another item and recognize issues with price tags.

“Like many innovative solutions, our most meaningful competition comes from the legacy systems deeply entrenched in the world of retail and the fear of change,” he added. “While we do see an acceleration of interest and adoption of digital innovation as a result of the ‘COVID effect,’ this is by far our biggest challenge.”

In a press statement, SoftBank Investment Advisers director Chris Lee said, “Through its innovative AI platform and image recognition technologies, we believe Trax is optimizing retail stores by enabling [consumer packaged goods] brands and retailers to execute better inventory strategies using data and analytics. We are excited to partner with the Trax team to help expand their product offerings and enter new markets.”

Cosmose, a platform that analyzes foot traffic in physical stores, gets $15 million Series A

Cosmose, a platform that tracks foot traffic in brick-and-mortar stores to help companies predict customer behavior, announced today it has raised a $15 million Series A. The round was by Tiga Investments, with participation from returning investors OTB Ventures and TDJ Pitango, who co-led Cosmose’s seed round last year. The company said its valuation is now more than $100 million.

The Series A will be used for product development and geographic expansion, starting with Southeast Asian markets this year, followed by the Middle East and India. Chief executive officer Miron Mironiuk, who founded Cosmose in 2014, said its goal is to break even and generate profit by 2021.

Cosmose has offices in Shanghai, Hong Kong, New York and Warsaw, where is software engineering team is based. Most of the stores its tech is currently use in are in China and Japan, and its clients include companies like Walmart, Marriott, Samsung, and LVMH.

As companies try to recover from the impact of COVID-19, Mironiuk said Cosmose’s platform has helped clients make decisions about when to reopen stores and what kind of inventory to stock, and how to increase revenue. For example, ‘some shops wanted to connect with customers who used to shop in their physical locations and encourage them to buy online,” he said. “Hotels in Japan were focused on promoting their in-house restaurants to local residents to make up for the lost revenue.” The company is also working with Boston Consulting Group on a report called “COVID-19 offline retail recovery traffic in China” for publication next week.

Mironiuk said that a PwC audit of the platform’s accuracy completed in December 2019 confirmed its ability to track customers within 1.6 meters of their location in a store, and that its data ecosystem now comprises of more than one billion smartphones and 360,000 stores. Cosmose’s plan is to grow that to two billion smartphones and 10 million stores by 2022.

The company offers three main products: Cosmose Analytics, which tracks customers’ movements inside brick-and-mortar stores; Cosmose AI, a data analytics and prediction platform to help retailers create marketing campaigns and increase sales; and Cosmose Media, for targeting online ads.

Cosmose does not require hardware installation, which means no regular maintenance is required after Cosmose maps a store, and helps it differentiate from rivals.

There are other companies that also analyze foot traffic in brick-and-mortar stores, including RetailNext and ShopperTrak, but being tracked might alarm customers who are concerned about their privacy. Mironiuk said all of the smartphone data Cosmose AI gathers is anonymized, so the company doesn’t know who shoppers are. The platform uses alphanumeric IDs called OMNIcookies, does not collect personal data like phone MAC addresses, mobile numbers, or email addresses, and follows data privacy laws in each of the countries it operates in. It also allows shoppers to opt-out of tracking.

In a press statement about the investment, Raymond Zage, the CEO and founder of Tiga Investments, said “I was attracted by the strong results Cosmose is already achieving for some of the world’s recognizable brands, while simultaneously ensuring user privacy is protected. Cosmose team is saving stores while enhancing consumer experience.”

Amazon launches physical kiosks in UK train stations, a local extension of its Treasure Trucks

After announcing a year-long pilot of pop-up shops in the UK earlier this week to sell items from smaller marketplace merchants, Amazon has added another development to its brick-and-mortar efforts in the country. Starting today, the company is setting up physical kiosks, initially in train stations, to sell passers-by a rotating range of items at discounted prices.

The first of these will be in London, where Amazon is situating them in rail stations — Charing Cross, King’s Cross, Paddington, Liverpool Street and my local station London Bridge — and will start off by selling Boodles Mulberry Gin for £14.99 a bottle (a 40% discount on the normal price, Amazon notes).

The kiosks, Amazon says, are an extension of the company’s Treasure Truck concept, which sees a large vehicle doing the rounds across various towns — currently London, Manchester, Liverpool, Sheffield, Leeds, York, Birmingham, Coventry, Portsmouth, Southampton, Nottingham, Leicester, Windsor, Maidenhead, Reading and Slough (for US readers: the original site of The Office) — offering a rotating selection of items at discounted prices. These have been operating in the UK for a couple of years now.

With Treasure Truck in the UK, you sign up for the service (by texting “truck” to 87377) and Amazon texts you to let you know when the truck is coming your way. Users can pre-order and pay for items to collect them from the truck. It looks like the same format will apply to the kiosks, which will also become pick-up points. To incentivise more signups, Amazon said that new users will get an additional introductory discount of £5 per bottle.

Kiosks are a practical adaptation of the Treasure Truck concept for Amazon: as with other cities in Europe, the locations Amazon visits in the UK have narrow streets sometimes clogged with traffic and generally not designed for speedy arrivals of giant vehicles, and the population is more dense.

Also, situating kiosks in rail stations to catch people during their commutes means more may buy knowing they are on their way home or to an office so will not have to carry items around all day.

“Kiosks are a natural extension of the exciting shopping experience of Amazon’s Treasure Truck. Whether you’re on the way to work or heading home for the day, Amazon customers and passersby will have a fun and convenient way to shop for an amazing deal, get their hands on a trending product or take part in a fun event. Kiosks will help turn an ordinary day into something a bit more special,” said Suruchi Saxena Bansal, Country Leader, Amazon Treasure Truck, in a statement.

More generally, Amazon has been slowly increasing the different channels that it uses to connect with potential customers beyond its basic website and mobile app.

This is because “omnichannel” is the order of the day in commerce: in markets that are especially competitive and mature, we’ve seen a big shift among retailers to cater to a wider variety of audiences and sell to them in whichever channel where they are spending time and discovering things.

That’s included selling on social media (Instagram for one is making a big push with this), through email (see: Mailchimp’s efforts here), and of course doing things the old-fashioned way, by selling in person (something that efforts from the likes of Square and PayPal have also helped to grow).

That in-person experience is something that Amazon — born in the virtual world of cyberspace — has been doubling down on for years to reach a wider set of shoppers.

Its efforts have included bookstores near college campuses, cashier-free Amazon Go stores, the whopping acquisition of Whole Foods, and — as of earlier this week — setting up pop-up shops.

The latter are particularly ironic, given that the Amazon name is regularly invoked when people discuss how brick-and-mortar shops — and in the UK, “high street” shopping precincts — have died a death.

A year ago, there was a rumor that Amazon was negotiating in the UK to acquire a selection of large retail locations that were being vacated by the bankrupt hardware and DIY chain Homebase.

These sprawling locations, situated often in town outskirts among other large stores with huge parking lots, are a far cry from little kiosks in crowded train stations. And indeed, the Homebase deal, if it was every really on the cards, never came to pass.

But the report and Amazon’s wider track record are sure signs that the commerce is only going to get more physical, not less. It’s not a question of “if”, but rather of how and when.