Retail Tech Investment and M&A Tracker
From computer vision-driven technologies aimed at cutting down on apparel returns by enabling consumers to utilize advanced sizing tech to artificial intelligence (“AI”) and machine learning-driven software that helps to prevent counterfeiting, piracy, and digital impersonators, companies across the retail segment are introducing new tools that make fashion commerce – and retail more broadly – “more nimble, sustainable, and engaging for shoppers.” At the same time, the striking rise of e-commerce, especially in the wake of the pandemic, and the post-pandemic call for companies to provide consumers with “an exponentially deeper level of engagement [both] online and offline,” per McKinsey, has led to the rise of an array of B2B SaaS solutions-providers that are looking to help transform the retail segment.
Research published by Google’s Cloud business in November 2020 (and reported by Wired) revealed that retailers were “looking to use AI within ten different areas of their business – from demand prediction to customer loyalty schemes and product personalization.” More recently, McKinsey stated in 2021 that “the operational potential of technology is becoming ever more apparent,” with fashion companies that embed AI into their businesses models now – in order to “enable new logistics and sales-fulfillment options (such as click-and-collect and drive-through), fuel innovative ways of customer acquisition, help predict and manage inventory to create a more resilient supply chain,” etc. – standing to see “a 118 percent cumulative increase in cash flow by 2030.” On the other hand, the consultancy stated that companies that “are slower to invest in digital technology will lag behind, and could see a 23 percent relative decline.” As for the market, itself, Meticulous Research expects the value of the AI-in-retail market, alone, to reach $19 billion by 2027.
Against this background and in light of enduring efforts to bring new tech to the retail market, we have compiled a tracker of funding and M&A to provide a broad overview of tech-centric investments in fashion and the broader retail space, and shed light on what the trajectory of this segment of the market looks like more broadly …
Mar. 8, 2023 – Elyn Raises €2.5M in Pre-Seed Round
Elyn, a Paris-based startup that enables online merchants to offer consumers a try before they buy option at checkout, has raised €2.5 million ($2.7 million) in a pre-seed round led by Sequoia Arc and Headline, with participation from Motier Ventures (the tech-focused family office of the owners of Galeries Lafayette Group), Financière Saint James, Founders Future’s Marc Menasé, and former Stripe EMEA director Guillaume Princen. “With try-before-you-buy (“TBY”), you only pay for what you decide to keep,” Elyn co-founder and CEO El Mehdi Hachad told TechCRunch. “We are also helping retailers with their returns so that return requests are turned into exchanges directly in the return interface that we provide.” The company’s founders claim that “every major e-commerce brand will offer a TBYB option in the next 12 months.”
Feb. 21, 2023 – Fabacus Closes £4.5M Round
Fabacus has raised £4.5M in funding led to accelerate the growth of its data intelligence platform, Xelacore. The round was led by Wealth Club with participation from Tom Singh OBE, Seneca Partners, Inovia, and Mitch Foreman. The London-based provider of a SaaS global licensing platform that connects retail industry license holders, licensees, and end users will use the new funds to accelerate growth and expand its operations and business reach. Founded in 2016, Fabacus claims that existing operating procedures for monitoring licensed IP are “largely siloed,” with license holders “frequently struggling to reconcile royalties” due to a lack of data and lax governance rules.
Feb. 13, 2023 – eBay Acquires 3PM Shield
eBay Inc. has acquired 3PM Shield LLC, a provider of advanced AI-based marketplace compliance solutions. San Jose, California-headquartered eBay said the acquisition will help to enhance its “world-class monitoring solutions with new technologies designed to prevent the sale of counterfeit items, unsafe products and illegal goods.” The marketplace site said in a statement on Feb. 13 that “bringing 3PM Shield to eBay” enables it to bring “advanced marketplace compliance technology in-house … as part of eBay’s ongoing commitment to provide sellers and buyers with a safe and trusted platform enabled by technology.” eBay acquired 3PM Shield LLC, also known as 3PM Solutions, and the deal closed as of February 9, 2023. Further details were not disclosed.
Jan. 11, 2022 – Style3D Acquires Fashion Tech Co. Assyst
Style3D, a leading digital solution provider in the global fashion industry, has acquired Munich-headquartered Assyst, a leading fashion technology company. Through this acquisition, the terms of which were not disclosed, Style3D says it will gain “a strong foothold in Europe’s fashion technology market” and will “extend its 2D and 3D CAD-integration systems and become uniquely positioned as a solution provider offering fashion companies a 3D-centric, all-in-one, seamless system” in order to “shorten development times and help enhance the efficiency of products to market, thus reducing company costs and associated waste.”
According to Eric Liu, CEO and Founder of Style3D, “Our combined strengths, comprising Assyst’s industry experience and Style3D’s Original Simulation Engine, will create a joint force in the global fashion technology ecosystem, helping companies transform through 3D digitalization.”
Dec. 13, 2022 – Beni Raises $4M for Resale Browser Tech
Beni announced the close of its seed round of $4 million, led by Buoyant Ventures, bringing its funding from both its pre-seed and seed rounds to over $5 million to date. The Santa Barbara-based company says that it “welcomes shoppers to the world of re-commerce by making it easier to find and buy secondhand apparel and accessories. When a shopper finds something they want, the browser extension suggests similar listings from leading resale sites.”
The company – which has partnered with over 30 resale sites, such as The RealReal, Rent the Runway, Vestiaire Collective, eBay, and Kidizen – stated in a release that “with Poshmark’s recent acquisition by Naver and ThredUp’s projected revenue exceeding $82B by 2026, shoppers are clearly invested in supporting the circular fashion economy. Beni was designed with this in mind, enabling shoppers to save money and shop sustainably with the click of a button.”
Dec. 13, 2022 – Fashion Cloud Raises €25M in Funding
Fashion Cloud has raised €25 million in a round led by European specialist growth equity investor Verdane and involving existing investors, including HEARTLAND. The 7-year-old Hamburg-based company, which boasts a B2B data and content exchange portal for fashion wholesalers and retailers, says it will use the new cash to “further develop established features like ‘content’ and ‘order,’ which allow retailers to access marketing material and product data from more than 600 brands.” Additionally the company – whose clients include Zalando, Magasin duNord, Hugo Boss and Scotch & Soda, among others – says it will “develop innovative products and build out its automated reorder suggestions (‘Smart Replenishment’), which ensures that stores have the accurate amount and the appropriate type of articles at any given time.”
In a statement, Fashion Cloud co-founder Alies ter Kuile, said: “Brands and retailers want to be able to work together more easily and effectively. This investment enables Fashion Cloud to take the collaboration between stakeholders to the next level. With strong partners on our side, we will ensure thetransformation of the fashion wholesale industry towards a more efficient and sustainable one.“
Dec. 8, 2022 – Pixyle AI Closes €1M Seed Round
Pixyle AI announced the close of a seed funding round, raising €1 million from South Central Ventures in order to “help fashion retailers with image recognition solutions by enabling them to deliver a better online shopping experience, boost e-commerce sales, and improve efficiency in catalogue management with smart product data entry.” Specifically, the Amsterdam-based company – which went live in 2019 and now counts companies like Depot as clients – “connects retailers’ online audience with the products they are really looking to buy” by utilizing “deep learning algorithms to process and tag entire fashion [image] catalogues” and providing companies with “highly accurate product attribute information” that can be used to deliver “better [e-commerce] search experiences.”
In a statement, Pixyle AI founder Svetlana Kordumova said, “Retail footfall has increased post pandemic but online shopping for clothes will continue to grow. We are also encouraged by the growth of the fast-growing fashion resale market, which presents a significant first-mover opportunity for Pixyle AI to help the circular economy take off. We have built algorithms specifically for user-generated images, allowing the AI to detect and recognize fashion items even in blurry, homemade selfies.”
Dec. 6, 2022 – Resale Software Co. Archive Raises $15M in Series A
Archive – a tech company building a resale operating system for brands ranging from Oscar de la Rena to North Face – announced a $15 million Series A round led by Lightspeed Venture Partners with participation from Bain Capital Ventures, Fernbrook Capital, G9 Ventures, and several minority investors. This round brings the San Francisco-based company’s total funding to more than $24 million to date. Archive will use the new cash to “immediately support hiring across engineering and brand success teams to help [it to] continue to innovate and scale its technology and integrations.” It will also enable Archive to meet “increasing demand from brands to incorporate resale into their businesses, and accelerate upcoming launches across North America and Europe.”
In a statement, Archive, which was founded in February 2021 by Emily Gittins and Ryan Rowe, says that it is known for “building highly differentiated resale programs that seamlessly integrate with a company’s consumer experience,” with the platform enabling brands to “deliver a consistent, premium experience for customers across all markets and channels (physical and digital) and access real-time data on sales, sell-through, conversion, CRM performance and more.”
Dec. 5, 2022 – Rokt Nabs $2.4B Valuation Following Latest Round
E-commerce technology and software solutions startup Rokt announced that it now boasts a valuation to $2.4 billion thanks to a “secondary funding round” led by investment firm Square Peg and asset manager Wellington Management, ahead of a planned IPO. This round follows from a December 2021 Series E round led by Tiger Global, which valued New York-based Rokt at $1.95 billion. The company, which uses AI and machine learning to analyze online shoppers and their engagement with products and services, counts companies like Live Nation, Groupon, Staples, Lands’ End, Fanatics, UrbanStems, GoDaddy, Vistaprint and HelloFresh as clients.
“Despite broader market declines in valuations, we continue to see rapid growth in Rokt driven by new ecommerce partners and an uplift from advertisers,” said Bruce Buchanan, CEO of Rokt. “Due to the challenging economic climate, ecommerce companies are focusing on more relevant customer experiences that improve economics and deliver new revenue. This has further propelled Rokt’s growth and we’re pleased to see this expression of support from existing investors as Rokt looks towards an IPO.”
Nov. 29, 2022 – Netail Closes $5M Seed Round
Netail, a technology that enables retailers to auto-identify competitors across the internet and track their assortments, availability and optimize prices in real time, announced the closing of $5 million in seed funding. The round was co-led by Magarac Venture Partners, which provides early-stage venture capital to dynamic entrepreneurs and successful technology companies throughout the Midwest.
“Consumer behavior has changed dramatically, and the majority of purchase decisions are now made online via search, marketplaces and social media,” Netail said in a statement. “With retailers struggling to adapt,” the company says that its AI technology is “designed to help them succeed by attracting, converting and retaining customers in these increasingly competitive digital arenas,” noting that “real-time data and decision-making are essential for retailers to better understand how products are positioned.”
Nov. 18, 2022 – Sizekick Raises €1.3M for Sizing SaaS
Munich-based Sizekick raised €1.3 million for its SaaS solution that aimed to help cut down on returns in the fashion e-commerce space by providing artificial intelligence and computer vision tech-driven sizing. Sizekick CTO Jake Lydon said in a statement, “As a new AI solution, our strategic partnership with Hohenstein enables us to meet the market’s high demand right from the start, and to take on the role of technology leader. Thanks to Hohenstein, our artificial intelligence is already learning from one of the world’s largest and highest-quality databases of 3D body scans. The gigantic advantage this provides our AI cannot be overstated.”
Nov. 14, 2022 – Anti-Counterfeiting Co. Red Points Raises $20M
Anti-counterfeiting and digital piracy startup Red Points raised $20 million to further build out its SaaS platform, which is used by brands – ranging from Hugo Boss to Real Madrid and Puma – to fight counterfeits, privacy, impersonation and distribution abuse. The round was led by IRIS VC with participation from existing investors Summit Partners and Eight Roads. (Other previous investors include Mangrove, Northzone and Banc Sabadell.) With the new cash, which brings its total funding to date to more than $75 million, Red Points wants to double down on its go-to-market plans, while also finding the resources to tighten up product features to combat more online fraud and “brand abuse,”
Red Points CEO Laura Urquizu said: “The OECD estimates that counterfeit goods cost the global economy over €450 billion a year, and this is just one of many rising threats that brands and consumers face in digital. Red Points enables companies to bring back revenue and brand equity lost to fraud, and this new funding will help us accelerate the adoption of the technologies that make it happen effectively.”