Trax Raises $640M in Series E Funding - Retail Analytics

Trax Secures $640 Million to Fuel Retail Technology Expansion

The COVID-19 pandemic spurred the adoption of new technologies across the retail landscape. Trax, a retail analytics company valued as a unicorn, anticipates this embrace of innovation will persist beyond the pandemic’s constraints. The Singapore-headquartered firm recently announced a $640 million Series E funding round to enhance its suite of products.

Investment Details and Company Background

These products leverage the power of computer vision and cloud-based software, assisting brick-and-mortar stores in optimizing inventory management, merchandising strategies, and overall operational efficiency. The funding round encompassed both primary and secondary capital, with SoftBank Vision Fund 2 and existing investor BlackRock leading the charge.

Additional participation came from new investors, including OMERS and the Sony Innovation Fund by IGV. Prior to this latest round, Trax had already secured $360 million in primary funding.

J.P. Morgan served as a placement agent during the Series E funding, bringing Trax’s total funding to date to $1.02 billion. While the company has not publicly disclosed its current valuation, reports indicate it achieved unicorn status in 2019.

Discussions regarding a potential initial public offering (IPO) surfaced last year, but CEO Justin Behar declined to comment on any current IPO plans when questioned by TechCrunch.

Global Presence and Future Investments

Established in 2010, Trax maintains its headquarters in Singapore, alongside offices in key global locations. These include Brazil, the United States, China, the United Kingdom, Israel, Mexico, Japan, Hungary, France, Russia, and Australia.

The company currently serves a diverse customer base spanning over 90 countries. Behar stated that the new funding will be strategically allocated to “invest heavily in global [go-to-market] strategies and technology for our flagship Retail Watch solution.”

The goal is to streamline the digitization process for both retailers and brands. Specifically, the capital will accelerate growth and drive continued innovation across Trax’s core technologies, including vision, machine learning, IoT, and marketplace solutions.

Retail Watch and Dynamic Merchandising

Retail Watch, launched last year, utilizes a combination of computer vision, machine learning, and advanced hardware – such as cameras and autonomous robots – to collect real-time data on product shelf availability.

The system proactively alerts staff to low stock levels, identifies and corrects pricing discrepancies, and verifies adherence to planograms, which are visual merchandising guidelines. Currently focused on center shelves, Retail Watch will expand to encompass categories like fresh food and produce.

Furthermore, the funding will support the expansion of Trax’s Dynamic Merchandising initiative. This partnership involves the on-demand work platform Flexforce and the shopping rewards app Shopkick, which Trax acquired in 2019, into new markets over the next one to two years.

Behar also highlighted plans to explore new use cases and potential acquisitions to further enhance Trax’s offerings and support retailers’ digitization journeys.

Pandemic-Driven Acceleration and Industry Shifts

The onset of the COVID-19 pandemic presented retailers with unprecedented challenges, including surge buying and rapidly shifting consumer behavior. In April 2020, Forrester predicted a 9.6% decline in global retail sales, equating to a $2.1 trillion loss, with a projected four-year recovery period.

However, Forrester’s more recent findings revealed that nearly 40% of retailers and wholesalers increased their technology investments despite budget cuts, implementing projects in weeks that previously required years.

Behar explained that the pandemic exposed the retail industry’s lack of preparedness for sudden demand fluctuations, leading to empty shelves and widespread stockouts. These disruptions, coupled with supply chain issues, labor shortages, and evolving channel dynamics, compelled brands and retailers to adapt their strategies.

He anticipates that this willingness to embrace new technologies will continue post-pandemic, with retailers exploring innovations like in-store navigation, enhanced browsing experiences, loyalty programs, and streamlined checkout processes.

Competitive Landscape and Differentiation

Trax’s Retail Watch, Dynamic Merchandising, and Dynamic Workforce Management solutions were already in development prior to the pandemic, but the crisis undoubtedly accelerated the need for these types of digital solutions.

Retail Watch now supports online ordering functionalities, such as displaying product availability to online shoppers and assisting store associates with order fulfillment. Dynamic Merchandising enables brands to quickly secure on-demand workers to address in-store execution issues, like urgent restocking needs.

Other companies operating in the retail analytics space include Quant Retail, Pensa Systems, and Bossa Nova Robotics. Trax differentiates itself through its cloud-based platform, which is described as “extensible, flexible and scalable.”

This platform integrates multiple technologies and data-collection methods, tailored to each store’s specific needs, utilizing IoT-enabled shelf-edge cameras, dome cameras, autonomous robots, and smartphone images for comprehensive store coverage.

The company’s proprietary computer vision technology is specifically designed for retail environments, accurately identifying individual SKUs on shelves, even in challenging conditions. It can distinguish between similar products, overcome visual obstructions, and detect pricing errors.

Behar acknowledged that the biggest challenge remains overcoming the inertia of legacy systems and the fear of change within the retail industry.

Industry Validation and Future Outlook

Chris Lee, a director at SoftBank Investment Advisers, stated in a press release, “Through its innovative AI platform and image recognition technologies, we believe Trax is optimizing retail stores by enabling [consumer packaged goods] brands and retailers to execute better inventory strategies using data and analytics. We are excited to partner with the Trax team to help expand their product offerings and enter new markets.”