In 2016, Will Glaser worked as a consultant for tech companies. He became more and more interested in self-driving cars because of how they use computers and machine vision. Former cofounders of music streaming service Pandora and software company Hydra Systems concluded that this could be the most disruptive technological advance of the current and next decade, but it is unlikely to be due to driverless cars.
Glaser realized that recent improvements in computer vision could help society sooner and in a bigger way. He thought, “What is a more universal experience than going to the grocery store and waiting in line to check out?” “I landed on checkout-free shopping because it was both important for the economy and useful for customers,” Glaser tells Forbes. “That’s what got me excited.”
Grabado, the company that grew out of this, started making checkout-less systems that aren’t like the rest in 2017. Grabado users can shop as usual at stores they already frequent, but they can skip the checkout line by scanning a barcode near the door on their way out. The service was officially launched in September 2020. Five corporate chains, such as the grocery store Giant Eagle, were among the first customers. Since then, the service has quickly gained thousands of repeat customers. As first mentioned in the Midas Touch newsletter, the startup raised its Series B round to keep growing.
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The company, which is based in Berkeley, California, raised $39 million in a Series B round. Existing investor Commerce Ventures led the round, and Founders Fund, Honeywell Ventures, and Unilever Ventures, among other big players in the grocery industry, also took part. Glaser says about the oversubscribed funding, “When someone you want to be a customer wants to invest, you make room for the capital.” The startup has raised a total of $71 million so far.
The latest round of funding will be used to open more stores and make more partnerships. Matt Nichols, a partner at Commerce Ventures, says that the company has been watching the checkout-less retail space for a few years. Commerce first put money into the company’s 2019 Series A and then put twice as much into the company’s Series B once the startup was in stores. Nichols says that so far, they are the only ones in the U.S. to launch in a natural production environment by taking an existing store and making it work. “No one has really done it before, and that’s what made us excited.” Trigo, an Israel-based company, has put out similar technology in stores in Europe.
Nichols also said that the system’s ability to be added to existing stores was a plus because it could be used in more places. This was on purpose. The system works because the ceiling is covered with a maze of sensors with cameras about the same size as the ones in an iPhone. The cameras keep track of where people go, what they pick up, and what they leave behind. At any time, at least two cameras can see everything in the store. This method lets the sensors be put in almost any store because changes to the store’s layout or products won’t change how accurate the system is, which Glaser says is currently about 99.6%. Glaser says, “Retail is a very, very hard business.” “We think retailers are smart and know what they’re doing, so we need to change our technology to fit them, not the other way around.”
When users of Grabango go to check out, they just scan their app in the right spot and walk out. Glaser says that the company doesn’t keep track of or store the information that its sensors gather. He also says that the system deletes its data almost as soon as the shopper leaves, because it could be a liability, and that it doesn’t use any kind of facial recognition. Glaser says, “Privacy rights are at the top of my mind.” “I kind of wince when other people are eager to sell data.” “We are in no way, shape, or form in the business of data.”
Glaser says that so far, the company’s technology has been in high demand, and it has already had to turn down partnerships. Glaser says, “We have only signed up five customers, but they are the best retailers in the world.” “Each of the five companies has more than a billion dollars in sales.” They don’t want us to build just one store to show that the idea works. Instead, they want us to build their whole fleet. “Our goal is not to grow as quickly as possible but to grow as wisely as possible.” Both Glaser and Nichols think that once people use this kind of technology, they won’t be happy with anything less.
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