Halla Raises $4.5M to Predict Grocery Shopping Trends with AI

Halla Secures $4.5 Million to Revolutionize Grocery Shopping Decisions

Halla is addressing a fundamental question: how do consumers choose what to eat? The company has recently received $4.5 million in Series A1 funding from Food Retail Ventures to further develop its capabilities in this area.

Company Origins and Mission

Founded in 2016 and based in New York, Halla was established by Gabriel Nipote, Henry Michaelson, and Spencer Price. Their goal is to create “taste intelligence,” a system that utilizes insights into human behavior to guide online shoppers toward desired food products, while simultaneously helping them discover new items. Ultimately, this leads to increased order values for retailers.

This funding round also included participation from SOSV and E&A Venture Capital, bringing Halla’s total funding to $8.5 million, as confirmed by CEO Spencer Price to TechCrunch.

The Core Technology: A Three-Engine API

Halla’s technology is offered as a plug-and-play API platform. It analyzes over 100 billion data points related to shoppers and products, channeling this information into three distinct engines:

• Search: This engine considers individual shopper preferences.
• Recommend: It suggests relevant, complementary products during the shopping experience.
• Substitute: This identifies suitable replacement options when a desired item is unavailable.

Addressing Out-of-Stock Challenges

Halla’s Substitute product was launched earlier this year to provide improved recommendations for out-of-stock items. This is a challenge that even major retailers like Walmart are actively working to solve.

Price referenced a McKinsey report indicating that 20% of grocery shoppers will switch to a competitor after a poor substitution experience.

Data Privacy and Contextual Recommendations

It’s important to note that none of the data utilized is linked to individual shopper’s personal information. The APIs focus solely on the attributes of the shopping behavior itself.

The system seeks context to deliver relevant suggestions and substitutions. For instance, if a shopper adds turkey and bread to their cart, the platform might recommend cheese and condiments.

Personalization in Grocery Shopping

“Personalization is key when it comes to grocery shopping and food choices,” Price explained. “If a customer specifically wants organic eggs from a particular brand, and they are out of stock, the substitution should be carefully considered.”

He continued, “We aim to guide shoppers to appropriate substitutions, enabling them to prepare the meal they intended, rather than settling for something ‘close enough.’ ”

Growth and Future Plans

Halla’s technology is currently integrated into over 1,100 e-commerce storefronts. The new funding will accelerate the company’s growth, including a plan to double the number of stores supported.

The company also intends to expand its team to 30 employees to accommodate growth and manage increasing customer demand, acknowledging a current influx of interest exceeding their capacity.

Halla is actively onboarding large customers for pilot programs and plans to expand internationally with new product lines within the next 18 months.

Financial Performance and Series B Potential

The company is experiencing “a near infinite increase in recurring revenue,” securing contracts worth six and seven figures, bringing them closer to achieving cash flow positivity.

This growth positions Halla favorably for a potential Series B funding round, should it be necessary, according to Price.

Board Addition and Industry Validation

As part of the investment, James McCann of Food Retail Ventures will join Halla’s board of directors.

McCann, who focuses his investments on food and retail technology, stated that grocery stores require innovative ways to inspire shoppers, and Halla is achieving this more effectively than other solutions he has observed.

“Their technology is significantly more advanced than anything else on the market,” he added. “They have a strong team and a compelling product, and are demonstrating substantial increases in sales through their suggestions and recommendations. Their results are exceptional.”

Pictured are Halla co-founders, from left: Spencer Price (CEO), Henry Michaelson (CTO & President), and Gabriel Nipote (COO).