The company raised $100 million in the initial Series C tranch in AprilRead more...
The company uses AI to charge shoppers for their items as they leave the store
As brick and mortar retail compete against the likes of online retailers like Jet and Amazon, those businesses have to find ways to appeal to customers who can more easily, and conveniently, do their shopping online.
One of the ways that those stores have tried to give customers a better experience is with self checkout, making checkout quicker and with less friction. Standard Cognition is a company taking that idea even further: it's an artificial intelligence-based system that lets consumers shop and pay without scanning or stopping to check out. The customer simply takes their items and leaves the store and they will automatically be charged for what they take with them. They don't have to spend any time waiting in line.
On Tuesday, the company, which had raised a $5 million round in October, announced an additional $5.5 million in follow-on seed funding from CRV. With this latest round, the company’s total funding has climbed to $11.2 million.
"With the recent advances in real-time machine vision, I have been looking for teams that are building vertical applications in this space. Jordan, Michael, and the other co-founders bring deep technical expertise and an audacious vision to leapfrog competition, big and small. That became crystal clear as I spent time with them at their demo store, then in Santa Clara, as well as their hacker house in Palo Alto," Devdutt Yellurkar, General Partner at CRV, told VatorNews.
"Rapid urbanization has already forced us to rethink home design and transportation systems. Small format urban stores already act as an extension of the pantry and storage. Providing such stores with autonomous checkout dramatically improves the consumer experience. But, rolling out store technology across the fleet of a retailer’s store is complex. The Standard solution can be easily integrated into existing systems and doesn’t require any retrofitting of store shelving and POS - this should be a major advantage to retailers adopting Standard’s technology."
Launched in August of last year, Standard Cognition's platform monitors shoppers with cameras as they walk throughout the store, and then uses machine vision to know what people taking off the shelf in order to know what to charge them for.
The customer would then pay one of two ways: either they'd have the Standard Cognition app, or the retailer's app, and they'd automatically be charged for what they walk out with. In the event that they don't have an app or phone, or if they want to pay with cash, they'd be able to easily pay with a machine as they walk out. In either case, no objects would have to be taken out and individually scanned.
All data that is collected by the cameras is stored on a computer in the back of the store, rather than on the cloud. As there's no Internet required to process the transaction, people can check out anonymously and not have to depend on having a good Internet connection to make sure their items are accurately counted.
"Since our last round, Standard has more than doubled in size in terms of employee base, moved to new HQ space in San Francisco, which we are rapidly growing out of, signed multiple retailers for pilots, and improved our technology by leaps and bounds," Michael Suswal, COO and co-founder of Standard Cognition, told me.
While Standard Cognition is in beta, and its customers are in "the early phases of deployment," he said, the company expects retailers who use the technology "to drive margin improvement by reducing labor costs as well as improving inventory management and supply chain costs."
"Our retailers also anticipate being able to drive incremental revenue by improving customer experience to drive additional shopping trips. Standard also enables customers to compete with larger chains and online offerings such as Amazon."
With initial pilot customers around the world, the company says it will use the funding to accelerate its global expansion, and to kick off initial pilots with multiple, global retailers, though Suswal could not tell me at this time which stores those would be.
"We will be able to announce some of those names later this year. Standard has executed agreements with multiple retailers across North America, Europe and Asia," he told me.
The new funding will also go toward hiring AI and machine vision experts, as well as managers with retail operations experience; the company plans to grow from 30 employees to 50 by the end of the year.
In addition to those hires, Standard Cognition also announced the appointment of two new executives to its management team on Tuesday: Jon Nam as Head of Global Operations and Evan Shiue as Head of Corporate Strategy and Growth.
Nam had previously held leadership positions at Macy’s, RetailNext, CCIntegration and CNBC, while Shiue previously held senior roles across strategy and corporate development at Fortune 50 companies, including Walmart and PepsiCo.
"Both Jon and Evan bring deep retail industry experience to Standard. Jon has worked on the retail operations and deployment at RetailNext and Macys. Evan comes to Standard from Walmart and PepsiCo and brings significant Silicon Valley experience with the past 10 years immersed at the intersection of retail and consumer technology," said Suswal.
"Their experience will be critical as Standard works on global customer implementations, because they both have frontline experience working in global retail companies."
(Image source: standardcognition.com)
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Founded in 1970, Charles River Ventures is an early-stage venture capital fund that takes a value-added, hands-on approach to support its portfolio companies.
Charles River Ventures is one of the nation’s oldest and most successful early-stage venture capital firms with approximately $1.4 billion under management. CRV is dedicated to helping exceptional entrepreneurs turn their ideas into the next category leaders in high growth technology and media sectors. Since its founding in 1970, CRV funds have been ranked among the industry’s top performers. CRV has offices in Cambridge, MA and Menlo Park, CA. For more information, visit www.crv.com.