When it comes to commerce innovation, physical retailers often feel like they’re under-developed compared to newer, faster-growing, more quantifiable (and still far from perfect) digital channels. But physical retail is far from completely extinct, and today the company that created a solution specifically designed to improve in-person sales data is announcing a big round of funding as it moves forward with some of the big rollouts it has signed with retailers – a sign how things are changing and the market’s appetite for it.
Nexitewhich has developed a tagging radio system and related data platform to read and analyze information related to these tagged items, has raised $67 million in Series C funding round and $100 million overall, money it plans to use both for R&D as well as provide services to their first clients.
“We are solving our customers’ biggest problem, which is the lack of real-time data in physical stores,” Anat Shakedd, the CEO who co-founded the Tel Aviv-based company with her husband Lior, said in an interview. She describes Nexite’s solution as “the only technology on the market” that does not require a battery to transmit data over long distances.
This latest cash tranche is co-led by Pitango Growth and Saban Ventures and also includes previous backers Battery Ventures, Intel Capital, Pitango First and Vertex Ventures. Prior to this C series, Nexite had been relatively inconspicuous, working on its technology and working with its first customers.
Notes in PitchBook that in this round, before it closed completely at just $53 million, Nexite’s valuation was just over $340 million. With Series C now valued at $67 million, that gives the startup a post-cash valuation of just under $356 million. (The company declined to comment on the figure when asked.)
The list of Nexite’s first customers speaks of a strong start to sales of its concept and product on the market. Shakedd said the startup has two major retailers signed “full rollout agreements” that will cover more than 1,000 stores and 80 million merchandise tags annually when they go live. She added that Nexite has also signed agreements with “the world’s four largest retailers” (names withheld), which are at various stages of development, and is in talks with 20 other major retailers.
The gap in the market that Nexite is targeting is that physical retailers today operate in a kind of data wilderness – they list products and sell them, hope for success and often have huge inventory that doesn’t sell; it’s a lot of trial and error with a few bits of observation and historical data thrown in to see why – and yet, being physical locations, they essentially sit on the mother lode of useful data if they can make better use of it.
Retail stores are like a black box,” Shakedd said. “Other than sales, they have no data at all. Now they are looking for it.”
Nexite has developed a labeling system that is attached to individual items, as well as a network of radio nodes (via Bluetooth beacons) that can be set up in the store to track the movement of an item and how one item can be moved at the same time as another. . These tags can either be included on the clothing label at the time of production, or the retailer can attach them with a sticker after that point. According to Shakedd, they are no bigger than “laundry labels”. The tags can transmit their data up to 10 meters, but more often up to seven meters, a distance the company is working on increasing to use even fewer nodes.
As Shakedd described it to me, the system sounds like a more versatile and functional RFID; RFID on steroids, in a way. The tags track not only where an item is in real time, but also where it has moved over time and what it has moved with (for example, if someone chooses a top to try on with a particular pair of trousers). . The data from the tags is processed in the cloud, which makes the tags themselves energy efficient: they are powered by radio waves emitted from the beacons.
And because the system is based on existing radio standards, it also works with the gates that retailers already have to track when someone takes an item out of the store without removing the RFID tag (for example, in the event of a shoplifting or checkout error); this means that they are also potentially replacing those clumsier radio tags.
This also means that the tags can be used in the contactless purchase process on a “just walk out” basis. One of the advantages of using these tags in a contactless payment environment compared to other emerging technologies is that Nexite tags do not depend on any camera technology: this makes them not only cheaper to implement, but also more functional because they are based on a camera. “just Walk Out” can’t be used, say, to track how clothes can be tried on.
Then, after the item is sold, the idea is that the tag can continue to “live” in the form of an application in which the buyer can choose to get more information about this item, other related items that the seller or brand of sale and other relevant information. It also has the potential to be another source of aftermarket data for retailers, information to which they have had almost zero access to until now.
Nexite has potential problems launching a business. If incorporating tags into production is ideal, then it means that many other stakeholders will support the idea and prove to all of them that this extra step in the process is worth their time and investment. There’s also the issue that these tags are perhaps too powerful: Shakedd emphasized that people need to opt-in to continue getting data from the tags after purchase, but some will inevitably see this as big brother-style tracking when they’re all really I hope that by shopping in person, you will walk away from this huge ghost of data.
And finally, the big question is how and if retailers have the infrastructure to deal with whatever data they collect: real-time is only effective if you have teams and IT people to analyze and read these data. data and actions with them. Digital transformation has definitely become the buzzword of the day, but that doesn’t mean that every company is ready to go through it or succeed in implementing it.
In any case, there are also plenty of opportunities to apply the technology created by Nexite to a much wider range of IoT and other use cases – any scenarios in which it is now considered useful to be able to track the movement and work of previously “unrelated” things.
“We went into retail first because they already label everything and 90% of products in categories like clothing already use security tags so we didn’t have to train them too much,” Shakedd said. “In addition, our overall solution is cheaper for their current needs than other solutions.” The Nexite system is being evaluated based on a full deployment of beacons and the data platform driving it, with more or less tags that are almost negligible, she says.
“The continuous flow of product data is transforming physical retail into living digital solutions. Nexite’s cutting-edge technology is gaining immense popularity in the market,” said Isaac Hillel, Managing Partner of Pitango Growth, in a statement. “Nexite is clearly creating a new, much needed category and we are excited to continue our initial investment with Pitango First until this latest round.”
“The continuous flow of product data and the resulting analytics is transforming retailers around the world,” added Barak Prydor, Managing Partner at Saban Ventures. “Nexite’s cutting-edge solution delivers significant business results never seen before in this space. We are very proud to be joining this incredible team on their journey.”
Credit: techcrunch.com /