With the goal of providing Google Analytics-like data capabilties for the physical retail store, a number of startups now track and analyze consumer activity within brick and mortar stores using mobile WiFi addresses, video feeds, and sensor technologies among other methods. And venture capital investors are eagerly stepping in to back them.
Between Q1’12 and Q3’13, in-store retail tracking startups raised $117M across 39 deals. And deal activity is already heating up in Q4’13, with several startups receiving venture financing in October including Nomi, which took $10M from investors including Accel Partners and Greycroft Partners, Intel Capital-backed Prism Skylabs and Motorola Solutions Venture Capital-backed ByteLight. The chart below highlights the growing amount of VC interest in this retail tech sub-category, which has seen year-over-year funding jump a whopping 153% and deal activity grow by nearly 40%.
As VCs warm up to tracking technologies in the physical store, the size of their checks has been steadily increasing. Since Q4’11, YoY median deal size has increased 215% and stood at $6.3M in Q3’13. The average deal size has grown 25% on a YoY basis, with Benchmark Capital-backed Euclid’s $17M Series B in Q1’13 contributing to the rise.
The nascency of in-store retail tracking is apparent in the early stage deal activity. Seed and Series A rounds make up 87% of deal activity in the space over the past two years, with mid-stage deals seeing just over 12% of deals through Q3’13. Of note is the absence of late-stage deals in the in-store retail tracking space as VCs are continuing to validate new, unproven technologies in the quickly emerging market and so no clear, large winners have emerged yet which would command later-stage venture rounds.