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BlackCart raises $8.8M Series A for its try-before-you-buy platform for online merchants
A startup called BlackCart is tackling one of the key challenges with online shopping: an inability to try on or test out the merchandise before making a purchase. That company, which has now closed on $8.8 million in Series A funding, has built a try-before-you-buy platform that integrates with e-commerce storefronts, allowing customers to ship items to their home for free and only pay if they choose to keep the item after a “try on” period has lapsed.
The new round of financing was led by Origin Ventures and Hyde Park Ventures Partners, and saw participation from Struck Capital, Citi Ventures, 500 Startups and several other angel investors, including Christian Sullivan of Republic Labs, Dean Bakes of M3 Ventures, Greg Rudin of Menlo Ventures, Jordan Nathan of Caraway Cookware and First National Bank CFO Nick Pirollo, among others.
The Toronto-based company last year had raised a $2 million seed.
Image Credits: BlackCart
BlackCart founder Donny Ouyang had previously founded online tutoring marketplace Rayku before joining a seed-stage VC fund, Caravan Ventures. But he was inspired to return to entrepreneurship, he says, after experiencing a personal problem with trying to order shoes online.
Realizing the opportunity for a “try before you buy” type of service, Ouyang first built BlackCart in 2017 as a business-to-consumer (B2C) platform that worked by way of a Chrome extension with some 50 different online merchants, largely in apparel.
This MVP of sorts proved there was consumer demand for something like this in online shopping.
Ouyang credits the earlier version of BlackCart with helping the team to understand what sort of products work best for this service.
“I think, in general, for try-before-you-buy, anything that’s moderate to higher price points, lower frequency of purchase, where the customer makes a considered purchase decision — those perform really well,” he says.
Two years later, Ouyang took BlackCart to 500 Startups in San Francisco, where he then pivoted the business to the B2B offering it is today.
Image Credits: BlackCart
The startup now provides a try-before-you-buy platform that integrates with online storefronts, including those from Shopify, Magento, WooCommerce, Big Commerce, SalesForce Commerce Cloud, WordPress and even custom storefronts. The system is designed to be turnkey for online retailers and takes around 48 hours to set up on Shopify and around a week on Magento, for example.
BlackCart has also developed its own proprietary technology around fraud detection, payments, returns and the overall user experience, which includes a button for retailers’ websites.
Because the online shoppers aren’t paying upfront for the merchandise they’re being shipped, BlackCart has to rely on an expanded array of behavioral signals and data in order to make a determination about whether the customer represents a fraud risk. As one example, if the customer had read a lot of helpdesk articles about fraud before placing their order, that could be flagged as a negative signal.
BlackCart also verifies the user’s phone number at checkout and matches it to telco and government data sets to see if their historical addresses match their shipping and billing addresses.
Image Credits: BlackCart
After the customer receives the item, they are able to keep it for a period of time (as designated by the retailer) before being charged. BlackCart covers any fraud as part of its value proposition to retailers.
BlackCart makes money by way of a rev share model, where it charges retailers a percentage of the sales where the customers have kept the products. This amount can vary based on a number of factors, like the fraud multiplier, average order value, the type of product and others. At the low end, it’s around 4% and around 10% on the high end, Ouyang says.
The company has also expanded beyond home try-on to include try-before-you-buy for electronics, jewelry, home goods and more. It can even ship out makeup samples for home try-on, as another option.
Once integrated on a website, BlackCart claims its merchants typically see conversion increases of 24%, average order values climb by 51% and bottom-line sales growth of 27%.
To date, the platform has been adopted by more than 50 medium-to-large retailers, as well as e-commerce startups, like luxury sneaker brand Koio, clothing startup Dia&Co, online mattress startup Helix Sleep and cookware startup Caraway, among others. It’s also under NDA now with a top-50 retailer it can’t yet name publicly, and has contracts signed with 13 others that are waiting to be onboarded.
Soon, BlackCart aims to offer a self-serve onboarding process, Ouyang notes.
“This would be later, end of Q2 or early Q3,” he says. “But I think for us, it will still be probably 80% self-serve, and then larger enterprises will want to be handheld.”
With the additional funding, BlackCart aims to shift to paying the merchant immediately for the items at checkout, then reconciling afterwards in order to be more efficient. This has been one of merchants’ biggest feature requests, as well.
Image Credits: BlackCart; team photo
The funding will also allow BlackCart to expand its remotely distributed 10-person team to around 50 by year-end, including engineers, product specialists, customer support staff and sales.
More broadly, it aims to quickly capitalize on the growth in the e-commerce market, driven by the COVID-19 pandemic.
“[We want to] take advantage of the favorable macroeconomic situation to scale as quickly as possible,” Ouyang explains. “We’re hoping to get to around $250 million in transactions through our platform by the end of 2021. And this would be driven by both engineering and sales hires, and just pushing it up,” he says.
Longer-term, Ouyang envisions adding more consumer-facing features to BlackCart’s platform, like on-demand returns where a courier comes to the house to pick up your return, for example.
“Our firm is excited to partner with BlackCart as it makes try-before-you-buy the standard in online shopping,” said Prashant Shukla of Origin Ventures, who now sits on BlackCart’s board, as result of the new financing. “Its underwriting technology provides merchants with peace of mind, and its best-in-class consumer experience delivers significant sales and conversion lifts. Digital Native generations expect to be able to shop online exactly as they would in a retail store, and BlackCart is the only company providing this experience,” he adds.
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Curtsy, a clothing resale app aimed at Gen Z women, raises $11 million Series A
Curtsy, a clothing resale app and competitor to recently IPO’d Poshmark, announced today it has raised $11 million in Series A funding for its startup focused on the Gen Z market. The app, which evolved out of an earlier effort for renting dresses, now allows women to list their clothes, shoes and accessories for resale, while also reducing many of the frictions involved with the typical resale process.
The new round was led by Index Ventures, and included participation from Y Combinator, prior investors FJ Labs and 1984 Ventures, and angel investor Josh Breinlinger (who left Jackson Square Ventures to start his own fund).
To date, Curtsy has raised $14.5 million, including over two prior rounds, which also included investors CRV, SV Angel, Kevin Durant, Priscilla Scala and other angels.
Like other online clothing resale businesses, Curtsy aims to address the needs of a younger generation of consumers who are looking for a more sustainable alternative when shopping for clothing. Instead of constantly buying new, many Gen Z consumers will rotate their wardrobes over time, often by leveraging resale apps.
Image Credits: Curtsy
However, the current process for listing your own clothes on resale apps can be time-consuming. A recent report by Wired, for example, detailed how many women were spinning their wheels engaging with Poshmark in the hopes of making money from their closets, to little avail. The Poshmark sellers complained they had to do more than just list, sell, package and ship their items — they also had to participate in the community in order to have their items discovered.
Curtsy has an entirely different take. It wants to make it easier and faster for casual sellers to list items by reducing the amount of work involved to sell. It also doesn’t matter how many followers a seller has, which makes its marketplace more welcoming to first-time sellers.
“The big gap in the market is really for casual sellers — people who are not interested in selling professionally,” explains Curtsy CEO David Oates. “In pretty much every other app that you’ve heard about, pro sellers really crowd out everyday women. Part of that is the friction of the whole process,” he says.
On Curtsy, the listing process is far more streamlined.
The app uses a combination of machine learning and human review to help the sellers merchandise their items, which increase their chances of selling. When sellers first list their item in the app, Curtsy will recommend a price, then fill in details like the brand, category, subcategory, shipping weight and the suggested selling price, using machine learning systems training on the previous items sold on its marketplace. Human review fixes any errors in that process.
Also before items are posted, Curtsy improves and crops the images, as well as fixes any other issues with the listing, and moderates listings for spam. This process helps to standardize the listings on the app across all sellers, giving everyone a fair shot at having their items discovered and purchased.
Another unique feature is how Curtsy caters to the Gen Z to young Millennial user base (ages 15-30), who are often without shipping supplies or even a printer for producing a shipping label.
Image Credit: Curtsy / Photo credit: Brooke Ray
First-time sellers receive a free starter kit with Curtsy-branded supplies for packaging their items at home, like poly mailers in multiple sizes. As they need more supplies, the cost of those is built into the selling flow, so you don’t have to explicitly pay for it — it’s just deducted from your earnings. Curtsy also helps sellers to schedule a free USPS pickup to save a trip to the post office, and it will even send sellers a shipping label, if need be.
“One of the things we realized quickly is Gen Z does not really have printers. So we actually have a label service and we’ll send you the label in the mail for free from centers across the country,” says Oates.
Later, when a buyer of an item purchased from Curtsy is ready to resell it, they can do so with one tap — they don’t have to photograph it and describe it again. This also speeds up the selling process.
Overall, the use of technology, outsourced teams who improve listings and extra features like supplies and labels can be expensive. But Curtsy believes the end result is that they can bring more casual sellers to the resale market.
“Whatever costs we have, they should be in service of increased liquidity, so we can grow faster and add more people,” Oates says. “In case of the label service, those are people who otherwise wouldn’t be able to participate in selling online. There’s no other app that would allow them to sell without a printer.”
Image Credits: Curtsy
This system, so far, appears to be working. Curtsy now has several hundred thousand people who buy and sell on its iOS-only app, with an average transaction rates of three items bought or sold per month. When the new round closed late in 2020, the company was reporting a $25 million GMV revenue run rate, and average monthly growth of around 30%. Today, Curtsy generates revenue by taking a 20% commission on sales (or $3 for items under $15).
The team, until recently, was only five people — including co-founders David Oates, William Ault, Clara Agnes Ault and Eli Allen, plus a contract workforce. With the Series A, Curtsy will be expanding, specifically by investing in new roles within product and marketing to help it scale. It will also be focused on developing an Android version of its app in the first quarter of 2021 and further building out its web presence.
“Never before have we seen such a strong overlap between buyers and sellers on a consumer-to-consumer marketplace,” said Damir Becirovic of Index Ventures, about the firm’s investment. “We believe the incredible love for Curtsy is indicative of a large marketplace in the making,” he added.
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US shopping app downloads on Black Friday reached a record 2.8M installs
Many U.S. consumers spent this year’s Black Friday sales event shopping from home on mobile devices. That led to first-time installs of mobile shopping apps in the U.S. to break a new record for single-day installs on Black Friday 2020, according to a report from Sensor Tower. The firm estimates that U.S. consumers downloaded approximately 2.8 million shopping apps on November 27th — a figure that’s up by nearly 8% over last year.
However, this number doesn’t necessarily represent faster growth than in 2019, which also saw about an 8% year-over-year increase in Black Friday shopping app installs, the report noted. This could be because mobile shopping and the related app installs are now taking place throughout the month of November, though, as retailers adjusted to the pandemic and other online shopping trends by hosting earlier sales or even month-long sales events.
Image Credits: Sensor Tower
The data seems to indicate this is true. Between November 1 and November 29, U.S. consumers downloaded approximately 59.2 million shopping apps from across the App Store and Google Play — an increase of roughly 15% from the 51.7 million they downloaded in Novenber 2019. That’s a much higher figure than the 2% year-over-year growth seen during this same period in 2019.
Another shift taking place in mobile shopping is the growing adoption of apps from brick-and-mortar retailers. During the first three quarters of 2020, apps from brick-and-mortar retailers grew installs 27%. This trend continued on Black Friday, when five out of the top 10 mobile shopping apps were those from brick-and-mortar retailers, led by Walmart.
Image Credits: Sensor Tower
Walmart saw the highest adoption this year, with around 131,000 Black Friday installs, followed by Amazon at 106,000, then Shopify’s Shop at 81,000. Combined, the top 10 apps saw 763,000 total new installs, or 27% of the first-time downloads in the Shopping category.
Because the firms are only looking at new app installs, they aren’t giving a full picture of the U.S. mobile shopping market, as many consumers already have these apps installed on their devices. And many more simply shop online via a desktop or laptop computer.
To give these figures some context, Shopify reported on Saturday it had seen record Black Friday sales of $2.4 billion, with 68% on mobile. And today, Amazon announced its small business sales alone topped $4.8 billion from Black Friday to Cyber Monday, a 60% year-over-year increase, but it didn’t break out the percentage that came from mobile.
Sensor Tower and rival app store analytics firm App Annie largely agreed on the top five shopping apps downloaded this Black Friday. They both saw Walmart again beating Amazon to become the most-downloaded U.S. shopping app on Black Friday — as it did in 2019. The two firms reported that Amazon remained No. 2 by downloads, followed by Shopify’s Shop app, then Target. However, Sensor Tower put Best Buy in fifth place, followed by Nike, while App Annie saw those positions swapped.
Image Credits: App Annie
The rest of Sensor Tower’s top 10 included SHEIN, Sam’s Club, Klarna, then Offer Up, while App Annie’s list was rounded out by SHEIN, Sam’s Club, Wish, then Offer Up.
The pandemic’s impact may not have been obvious given the growth in online shopping this year, but the recession it triggered has played a role in how U.S. consumers are paying for their purchases. “Buy Now, Pay Later” apps like Klarna were up this year, even breaking into the top 10 per Sensor Tower’s data. The firm also noted that many new shopping apps launched this year focused on discounts and deals, and retailers ran longer sales this year, as well.
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PayPal details its digital wallet plans for 2021, including crypto, Honey integration and more
PayPal this week laid out its vision for the future of its digital wallet platform and its PayPal and Venmo apps. During its third-quarter earnings call on Monday, the company said it plans to roll out substantial changes to its mobile apps over the next year to integrate a range of new features, including enhanced direct deposit, check cashing, budgeting tools, bill pay, crypto support, subscription management, buy now/pay later functionality and all of Honey’s shopping tools.
While PayPal had spoken in the past about bringing Honey’s capabilities into PayPal, CEO Dan Schulman detailed the integrations PayPal has in store for the deal-finding platform it bought last year for $4 billion, as well as a timetable for both this and the other app updates it has in store.
The Honey acquisition had brought 17 million monthly active users to PayPal. These users turned to Honey’s browser extension and mobile app to find the best savings on items they want to buy, track prices and more.
But today, the Honey experience still remains separate from PayPal itself. That’s something the company wants to change next year.
According to Schulman, the company’s apps will be updated to include Honey’s shopping tools, like its Wish List feature that allows you to track items you want to buy, price monitoring tools that alert you to savings and price drops, plus its deals, coupons and rewards. These tools will become part of PayPal’s checkout solution itself.
That means the company will be able to track the customer from the initial deal-hunting phase where they’re indicating their interest in a certain product, target them with savings and offers, then guide them through its checkout experience all in one place.
PayPal will also provide “anonymous demand data” to merchants based on consumer engagement with Honey’s tools to help them drive sales, the company said.
What’s more, PayPal put timeline on the Honey integrations and the other updates it plans to roll out over the course of the next year.
Bill Pay will start to roll out this month, PayPal said, with a large redesign of the digital wallet experience expected for the first half of 2021. Much of the new functionality will be arriving in the second quarter and the second half of the year, with a goal of having the majority of the changes rolled out by the end of next year.
This also includes PayPal’s plans for cryptocurrencies, announced at the end of October. The company aims to support Bitcoin, Ethereum, Bitcoin Cash and Litecoin at first, initially in the U.S.
Speaking to investors during the earnings call, Schulman also noted when PayPal plans to bring crypto to more users and geographies. He said the ability to buy, sell and hold cryptocurrencies will first arrive in the U.S., then will roll out to international markets and the Venmo app in the first half of next year. (Currently, PayPal is offering U.S. users to join a waitlist for the new crypto features in-app).
Image Credits: PayPal
This change will allow PayPal’s users to shop using cryptocurrencies across the company’s 28 million merchants without requiring additional integrations on merchants’ part. The company explained this is due to how it will handle the settlement process, where users will be able to instantaneously transfer crypto into fiat currency at a set rate when checking out with PayPal merchants.
“This solution will not involve any additional integrations, volatility risk or incremental transaction fees for either consumers or merchants, and will fundamentally bolster the utility of cryptocurrencies,” said Schulman. “This is just the beginning of the opportunities we see as we work hand in hand with regulators to accept new forms of digital currencies,” he added.
PayPal also recently joined the “buy now, pay later” race with its new “Pay in 4” installment program that lets consumers split purchases into four payments. This debuted in France ahead of its late August U.S. launch and has since rolled out to the U.K. (as Pay in 3). This too, will become more integrated into the company’s apps in the months ahead.
Venmo — which the company expects to reach $900 million in revenues next year — will see the expansion of business profiles, and will gain crypto capabilities, more basic financial tools and shopping tools, as well as a revamp of the “Pay with Venmo” checkout experience.
Schulman referred to the company’s plans to overhaul its Venmo and PayPal apps as a “fundamental transformation,” due to how much new functionality they will include as the changes roll out over the next year as well as the new user experience — basically, a redesign — that will allow people to move easily from one experience to the next instead of having to change apps or use a desktop browser, for example.
PayPal’s earnings hadn’t excited Wall Street investors this week, sending the stock down on its lack of 2021 guidance. But the year ahead for PayPal’s digital wallet apps looks to be an interesting one.
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US holiday shopping season on mobile expected to be largest to date, topping 1B hours on Android
The coronavirus pandemic’s impact on the holiday shopping season is already underway. Amazon has delayed its annual sales event, Prime Day, from July to October 2020, while top e-commerce retailers, including Walmart, Target and Amazon, are becoming more powerful than ever. According to a new report from App Annie, mobile shopping apps are poised to see their biggest shopping season to date. The mobile data and analytics firm is estimating that U.S. consumers will spend more than 1 billion hours on Android devices alone during the fourth quarter, a 50% increase from the same time last year.
This forecast represents a jump ahead for mobile commerce that wasn’t expected until four to six years from now, but the pandemic has pushed that timetable forward.
Image Credits: App Annie
The firm also predicts that the pace of online shopping will look different than in years past.
While, typically, holiday shopping would be concentrated in the weeks around Black Friday and Cyber Monday, it’s expected that the shopping season this year will be longer and more drawn out. To some extent, this could be attributed to Prime Day’s delay, but the economic pressures of the pandemic are also taking their toll.
Heading into the third quarter, unemployment rates in the U.S. were still higher than during the Great Financial Crisis and more than two times higher than pre-COVID rates. App Annie says this will manifest in lower disposable incomes and greater price sensitivity, which will in turn lead consumers to seek out deals and promotions for longer periods of time throughout the lead up to the 2020 holidays.
Prime Day’s delay may also impact the shopping activity that takes place during the normally busy November shopping days, given that the sales event will take place this year much closer to Black Friday and Cyber Monday than ever before.
App Annie also noted that Amazon’s app continues to rank No. 1 by monthly active users among U.S. Shopping apps, and sees strong cross-app usage with other top Shopping apps.
Image Credits: App Annie
For comparison’s sake, weekly sessions in Shopping apps had grown by 25% during peak weeks during Q4 2019. They were also up 15% in the U.K.
This growth trend will continue as the changes brought on by the pandemic have been built upon existing consumer behavior, which have now been dialed up. Those changes are here to stay, App Annie claims.
Image Credits: App Annie
Related to mobile shopping’s growth, and the more than 1 billion hours spent shopping in Q4 on Android, App Annie also predicts other categories of apps will benefit. PayPal, for example, reported its best quarter ever with total payment volume increasing 29% year over year.
Online grocery services are also booming, particularly in markets with rising COVID-19 cases, like the U.S. and Brazil. Higher usage of mobile grocery shopping apps is expected to continue through Thanksgiving in the U.S., as consumers use apps for checking inventory, self-checkout, delivery and buy online/pickup in store. Similarly, meal delivery services like Uber Eats, DoorDash and Grubhub are also expected to remain valuable and widely used in Q4.
Image Credits: App Annie
Outside the U.S., App Annie forecasts that Singles Day 2020 will bring in more than 310 billion CNY (over $45 billion in U.S. dollars) to make it the biggest shopping day ever. This will top last year’s record of $38 billion in sales, and follows Q3 2020’s 4.8% year-over-year retail sales growth in China.
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Google’s latest R&D project is Shoploop, a mobile video shopping platform
Google’s latest experiment is a video shopping platform designed to introduce consumers to new products in under 90 seconds. The company today is launching Shoploop, a project from Google’s internal R&D division, Area 120, where it tests out new ideas with a public user base.
Shoploop’s founder, Lax Poojary, had previously worked on online trip planner, Touring Bird, also at Area 120. Last year, that effort became one of a small number of R&D projects to graduate and become a part of Google itself.
Poojary says his new idea for interactive shopping was inspired by how consumers today use a combination of social media and e-commerce sites together when considering purchases. For example, users will pop between a social media app, like Instagram, then head to YouTube to see a tutorial or demo, then — if they like what they saw — actually make a purchase.
Of course, video shopping is not a novel idea. A number of startups, and even large companies, have already embraced a combination of video and commerce.
Image Credits: Google
Amazon, for example, runs a livestreaming platform, Amazon Live, on its retail site. YouTube this year introduced a new shoppable ad format and is placing products to buy underneath videos. Facebook has enabled live shopping, as well, and made an acquisition in this area in 2019. Instagram now has its own Shop destination, too.
There are also a number of mobile shopping startups that have embraced video, like Dote, which raised $12 million last year. Popshop Live raised $3 million in January. NTWRK combines shopping and live events. Depop sells with both photos and videos, similar to Instagram.There’s also Yeay, Spin, and other apps. And there are startups focused on providing technology for brands and influencers engaging in this space, like Bambuser, MikMak, and Buywith, to name a few.
That is to say, Shoploop hasn’t discovered a new, untapped trend. It’s simply joining in.
The shopping experience on Shoploop is interactive. Users don’t just scroll through images and text, but instead watch videos where creators show off things like nail stickers, hair products or makeup. The team says it’s starting with products in categories such as makeup, skincare, hair and nails and its working with creators, publishers and store owners in this market for the app’s content.
Currently, the creators work out their own brand deals for the content they showcase. The Shoploop product itself is not monetized.
The experience is similar to watching YouTube tutorials, but distilled down to the best bits. (Or perhaps it’s more like TikTok, in that case) The demos are meant to be relatable, giving consumers a feel for the brands and products in real life. When consumers find a product they like, they can save it for later or click to be directed to the merchants website to complete the purchase. The app also allows you to follow your favorite Shoploop creators and share videos with friends and family.
Such a product could prove important to Google’s larger mission around Shopping, if it gains traction. Google recently redesigned its Shopping vertical and shifted it to include mostly free listings, in response to Amazon’s growing ad business. Finding more ways to engage online consumers could be beneficial to the internet giant, and this video-slash-influencer fueled shopping experience appeals to a younger demographic, in particular.
Shoploop is launching today on mobile and is working on a desktop version. You can reach it via https://shoploop.app from your smartphone.
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How COVID-19 transformed the way Americans spend online
Ethan Smith is founder and CEO of Graphite, an SEO and growth marketing agency based in San Francisco. Ethan has served as a strategic advisor to Ticketmaster, MasterClass, Thumbtack and Honey.
COVID-19 has transformed the way Americans use their phones and the way they spend their time and money online. These shifts present both a number of challenges and a raft of opportunities for savvy growth marketers.
We’ve seen COVID-19 affect a number of verticals. A number of industries have taken a hit (like music streaming and sports), while some are expanding due to the pandemic (groceries, media, video gaming). Others have found distinctive ways to adjust the way they position and sell their product, allowing them to take advantage of changes in buyer behavior.
The key to being able to read and react to changes in this still-tumultuous time and tailoring your growth marketing accordingly is to understand how public sentiment is reflected in new purchasing behaviors. Here’s an overview of the most important trends we’re seeing that will allow you to adjust your growth marketing effectively.
By the numbers: A sheltering-in-place economy
Virtually all of the data we’ve seen shows a marked difference in buyer behavior following the WHO’s declaration of a pandemic on March 11, 2020. With consumers encouraged to stay home to deter the spread of COVID-19, it’s no surprise that the biggest change is the spike in online activity.
Image Credits: Branch (opens in a new window)
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Finally, an official Craigslist app
Fancy websites and services come and go, but Craigslist endures. And now one of its main shortcomings is fixed: there’s an official app. Currently available for iOS and in beta for Android, the app provides a true-to-form Craigslist experience: useful, unfussy and anonymous.
There isn’t much to say about the app beyond that it faithfully replicates the website, down to the color scheme. All categories of posts are available to browse or search; you can favorite things, save searches and change the way results look. Different categories have their pertinent settings, so when you look for a car you’ll get odometer, model year and so on the way you do on the site.
No account is required at all to browse listings or contact sellers, and conveniently all their contact info pops up easily, letting you email, text or call as desired.
Obviously the web app is still perfectly serviceable, and some may even prefer it. But it’s nice to have a native app, if only to deter the imitation Craigslist apps that piggyback on the popularity of the original no-frills listings.
The app was released yesterday and is already climbing the charts. Grab it today and start looking for free furniture!
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Trigo raises $22M for an automated grocery check-out platform, similar to Amazon Go
Automated check-out systems in supermarkets, where cashiers are replaced by barcode-readers and touchscreen interfaces for taking payments, have become a commonplace fixture in many parts of the world. But today, a startup that’s building what many believe will be the next generation of such systems — computer-vision-powered platforms that monitor what you take from the shelves and automatically tally it up as you are on the move so that you can leave without checking out — has raised funding to continue developing its product and help it connect with grocery retailers that have seen the advances of Amazon Go and also want to get in on the AI action without getting involved with Amazon itself.
Trigo, a computer vision startup out of Tel Aviv that is building check-out-free grocery purchasing systems specifically targeted at large supermarkets, has picked up a Series A round of $22 million. The funding is being led by Red Dot Capital, with previous Vertex Ventures Israel and Hetz Ventures also participating. This round brings the total raised by Trigo to $29 million.
The company is not disclosing its valuation, but says that it has a number of deals in place already with grocery chains, including an unspecified European chain and Shufersal, the largest grocer in Israel.
Shufersal already has plans to implement Trigo’s solution in 280 stores in the next five years, which speaks to the company’s ambitions and traction to date, even at this early stage in its development: The company says that it’s already piloting its camera and sensor technology in stores that are 5,000 square feet, or twice the size of a typical Amazon Go store. It’s, however, still fairly small compared to the size of a large supermarket (35,000-45,000 square feet) or even smaller challenger markets like a Trader Joe’s or a Lidl (20,000 square feet).
As with Amazon Go, Trigo works by implementing a series of cameras throughout a store to monitor shoppers and record what they are placing into their baskets. This is not just about being able to identify items: it’s also a triangulation system to ensure that people are not charged twice for items, and that items are removed from the total if they are discarded before a person leaves the store.
And it’s not just to speed things up, either. It’s to make shopping great again.
“I don’t actually think people really want grocery e-commerce,” Ran Peled, VP of marketing, said. “They do that because the supermarket experience has become worse with the years. We are very much committed to helping brick and mortar stores return to the time of a few decades ago, when it was fun to go to the supermarket. What would happen if a store could have an entirely new OS that is based on computer vision?”
Unlike Amazon Go, Trigo is not tied to any specific company that might potentially compete with the retailers that it is targeting, and the product can be implemented to work with loyalty cards, or without them.
However, given that Amazon has built one of the world’s most valuable companies by being both a simultaneous competitor and partner to businesses, I’m not sure that its competitor status will be a gating factor to the growth of Amazon Go, if it decides to productise it and sell the technology to other retailers… and neither does Trigo.
“The technology behind Amazon Go existed in the industry for about a decade before Amazon Go,” Peled said (Trigo was founded in 2018 by brothers Michael and Daniel Gabay). “But after it launched, it was a moment of realising, ‘Ah, this is really happening!’ ” Meaning, he knew now would be a fruitful period because other grocery retailers would want to get on board, and even if Amazon did roll Go out as its own service, and a service used by other retailers, there will be others who will never work with it, presenting a market opportunity to his startup.
If the endgame is bringing the time spent in the check-out phase down to zero, there are other startups working on alternative ways to reach that. Just last week, Caper raised a round of funding for a system that is based on “smart” trolleys, with sensors attached to grocery carts to take note of items and add them to your shopping bill. While the shopping cart might have the advantage of being able to more closely monitor an individual’s own shopping cart, store-wide systems like Trigo’s will potentially cost less to operate and the software might even be something that can be used on existing in-store cameras.
Interestingly, at a time when patents form one of the key ways that a company defends its intellectual property, Trigo is taking another approach. “We don’t file patents because we don’t want our technology to be public,” said Peled. “We have things that we don’t want anyone to see.” It’s an ironic, if perhaps telling, stance for a computer vision company.
In the rush to build tech solutions to all the world’s problems (and if not problems, at least all the world’s processes), there are bound to be others building further technology to bring grocery stores into the twenty-first century. Trigo presents one route to getting there, making it as much a coveted company for grocery businesses as it is for the companies that provide other services to them.
“We believe that Trigo’s world-leading computer-vision team will be the first to scale this technology globally and unlock the full potential of a true grocery-wide revolution,” said Barak Salomon, managing partner of Red Dot Capital. “The process of manually scanning barcodes for each separate item at check out is outdated and time-consuming. Trigo’s technology is going to save brick and mortar, revitalizing the in-store experience while keeping the best part of shopping alive.”
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Dote raises $12M and introduces live-streamed Shopping Parties
Mobile shopping startup Dote is announcing $12 million in new funding, as well as a new feature called Shopping Party.
Founder and CEO Lauren Farleigh said her initial goal was to create “a truly native mobile experience” that made it “easy to check out across a lot of different stores.”
Over time, recommendations from social media influencers have become a big part of the app. With Shopping Party, they’re taking center stage — the feature allows them to share live video while browsing different products on Dote and chatting with fans.
Farleigh said the idea came from a trip she took with Dote influencers to Fiji last fall. She described watching them shop and talk together at the airport, and in what she said was an “ah-ha moment,” she realized that there’s an experience that was “lost when we stopped going to the mall with our friends.”
She added that influencers embraced the idea, with some telling her, “We love going live on Instagram [but] it’s challenging because there’s no shared experience for us to have that meaningful interaction over. It usually turns into the same Q&A over and over again.”
Dote CEO Lauren Farleigh
Shopping Party offers one solution to that issue, because you’re actually browsing and talking about specific products in the Dote app. Apparently this was a real technical challenge — Shopping Party is leveraging Apple’s ReplayKit 2 framework to deliver two live streams (one from the phone camera, one from the Dote app) while also incorporating live chats.
Farleigh, who previously worked as a product manager at mobile gaming company Pocket Gems, also compared this to game streaming on Twitch, except for shopping.
To kick things off, Dote plans to host two Shopping Parties every hour from 6am to 10am Pacific time for the next two weeks. (The company says the average Shopping Party lasts about 15 minutes.) There also will be Shopping Parties sponsored by specific brands.
As for the funding, it was led by Goodwater Capital, with participation from Lightspeed Venture Partners and Harrison Metal. Dote has now raised a total of $23 million.
“[Dote’s] customer-centric shopping platform uniquely blends innovative technologies such as live-streaming with relevant and fun social features, setting the standard for how all major brands and retailers will connect with Gen Z,” said Goodwater Managing Partner Eric Kim in a statement. “We’re thrilled to partner with them to accelerate this transformation.”
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