At the current investment rate, startups providing tech to optimize brick-and-mortar retail could raise over $1B in 2017.
Deals to in-store tech startups dropped in Q2’17, but total funding jumped over 20% on the backs of several major deals to companies providing AI tools to retailers.
Using CB Insights data, we examined financing trends in the retail tech sector. Our in-store tech category focuses on startups providing technology to brick-and-mortar retailers, including beacons and sensors for tracking customers, point-of-sale software, tools for store associates, shelf monitoring systems, and more.
For a more detailed look into the diversity of the category, check out our market map here. This does not include restaurant-focused startups, which we’ve mapped separately here.
Quarterly deals and dollars
In-store tech startups raised $229M across 32 deals in Q2’17, representing a 29% drop in deals from Q1 but a 21% rise in investment dollars. The quarter’s largest deal went to Trax, a retail analytics startup that uses machine vision to track in-store activity and offer insights to retailers and CPG brands. Trax raised $64M in a private equity round led by Warburg Pincus, bringing the company’s total disclosed funding to $148M.
Retail loyalty platform LevelUp raised the quarter’s second largest deal, with a $37M Series F that boosted total funding to $103M. In third, Reflexis, a workforce optimization tool that works with Dollar General, TJ Maxx, and other retailers, raised $33M in private equity from Great Hill Partners.
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Startups working on tech for brick-and-mortar retail have the potential to upend the industry. Look for In-Store Retail Tech in the Collections tab.
Track retail tech startupsAnnual deals and dollars
The early days of Q3’17 saw a large mega-round to an in-store tech startup: Brain Corp, which is building autonomous navigation systems for retail robots, raised a $114M Series C from Qualcomm Ventures and Softbank Capital. The deal, which will help Brain Corp develop self-driving shopping carts and janitorial robots, is the largest deal in 2017 to date.
The $64M private equity round to Trax, described above, was the second-largest deal of 2017 (and like Brain Corp, Trax focuses on machine vision). The third-largest deal also took place in early Q3’17 — a $50M Series B to NewStore, a retail platform that merges in-store and mobile experiences. NewStore has $97M in total disclosed funding from General Catalyst, Activant Capital Group, and others.
This report was created with data from CB Insights’ emerging technology insights platform, which offers clarity into emerging tech and new business strategies through tools like:
- Earnings Transcripts Search Engine & Analytics to get an information edge on competitors’ and incumbents’ strategies
- Patent Analytics to see where innovation is happening next
- Company Mosaic Scores to evaluate startup health, based on our National Science Foundation-backed algorithm
- Business Relationships to quickly see a company’s competitors, partners, and more
- Market Sizing Tools to visualize market growth and spot the next big opportunity