Trigo Raises $100 Million As AI Drives Retail Innovation
Tel-Aviv based Trigo announced today it has raised $100 million in a new financing round led by Singapore investment firm Temasek.
New investors include Germany’s SAP SE, who will also help commercialize Trigo’s solution. Existing investors joined the round, including 83North, Hetz Ventures, Red Dot Capital Partners, Vertex Ventures, and supermarket giant REWE Group, one of the world’s leading retailers and Germany’s second-largest food retail chain.
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Trigo will use the funds to scale deployment of autonomous urban supermarkets across Europe and the U.S., enter new geographies, and develop its store and inventory management software application suite. The Israeli startup plans to add new applications with which retailers can track inventory in real time, minimize out-of-stock and expired items for in-store and online shopping, mitigate fraud, personalize marketing, and manage store and supply chain operations predictively.
Michael Gabay, Trigo’s co-founder and CEO said in a statement: “We have proven that we can deploy computer-vision and AI to empower physical stores with the same kinds of insights and capabilities that e-commerce stores have. This investment allows Trigo to execute on its expansion plan and mature our product to support the evolving needs of our customers.”
Gabay told me last month that it took his large team of computer vision, IoT and AI experts a few years to get to a level where their “retail operating system” supports all the products in the store with 99% accuracy. This represents a significant competitive advantage in a rapidly growing market.
The number of stores worldwide offering a frictionless checkout experience to customers using checkout-free technology increased threefold during 2021 to over 250, according to RBR. Trigo estimates that its current target market consists of 500,000 convenience and small format grocery stores worldwide that have the potential to be retrofitted with AI-based frictionless technology.
RBR forecasts the number of stores with checkout-free technology around the world will reach over 12,000 by the end of 2027. It states, however, that if pilots at big box and grocery retailers are deemed successful there will be more extensive rollouts across store networks.
Trigo’s solutions are currently deployed with some of world’s leading grocery retailers, including Tesco PLC in the UK, ALDI Nord in The Netherlands, REWE Group in Berlin and Cologne, Netto Marken-Discount (also known as Netto) in Utrecht, Israel’s Shufersal (SAE), and Wakefern Food Corp., the largest retailer-owned cooperative in the U.S.
The size and timing of Trigo’s new funding round reflects its investors’ confidence in its future. Global retail tech funding decreased 43% quarter-over-quarter to $13.2 billion in Q2 of 2022 and quarterly deals fell 21%, to 710, according to CB Insights. At $6.7 billion, total funding from mega-rounds ($100M+ deals) represented just half (51%) of retail tech dollars invested in Q2—a steep decline from two thirds (69%) in the first quarter of 2022, and the lowest share in 2 years. Mega-round activity continued to fall in the second quarter, dropping to 32 deals from 61 in the first quarter of 2022.
CB Insights notes, however, that the store management technology segment saw an increase in funding during Q2 with a 25% quarter-over-quarter increase to $3 billion compared to $2.4 billion in the first quarter. The 2022 year-to-date total of $5.3 billion has already surpassed the $4.1 billion in total funding for all of 2020. Average store management deal size over the first two quarters of 2022 was $43 million.
Customers are shopping again in physical stores and demand the same convenience and product availability they experience online. “Brick-and-mortars should aim to make the shopping experience a pleasurable lifestyle activity that goes far beyond today’s uninspiring offerings,” says Shay Ziv, Trigo’s VP of Marketing. The future of retail is a fusion of the online and offline worlds that focuses on end-to-end connected, convenient and cool experiences.