based in Tel Aviv Wheat announced today that it has raised $100 million in a new round of financing led by Singapore state-owned investment firm Temasek Holdings.
New investors include SAP SE of Germany, which will also help bring Trigo’s solution to market. Existing investors joined the round, including 83North, Hetz Ventures, Red Dot Capital Partners, Vertex Ventures and supermarket giant REWE Group, one of the world’s leading retailers and Germany’s second-largest food retail chain.
Trigo will use the funds to scale the rollout of autonomous urban supermarkets in Europe and the US, enter new geographies and develop its suite of store and inventory management software applications. The Israeli startup plans to add new applications with which retailers can track inventory in real time, minimize out-of-stock and expired items for in-store and online purchases, mitigate fraud, personalize marketing, and manage store operations and the supply chain predictively.
Michael Gabay, co-founder and CEO of Trigo, said in a statement: “We have shown that we can implement computer vision and AI to empower brick-and-mortar stores with the same kinds of insights and capabilities that e-commerce stores have. This investment allows Trigo to execute its expansion plan and mature our product to support the changing needs of our customers.”
Gabby told me last month that it took a few years for their large team of computer vision, IoT and AI experts to get to a level where their “retail operating system” supports all products in the store with 99% accuracy. This represents a significant competitive advantage in a rapidly growing market.
The number of stores worldwide offering a frictionless checkout experience to customers using checkout-free technology tripled during 2021 to more than 250, according to RBR. Trigo estimates that its current target market consists of 500,000 convenience and small-format grocery stores worldwide that have the potential to be modernized with frictionless AI-based technology.
RBR forecasts that the number of cashless-enabled stores worldwide will reach more than 12,000 by the end of 2027. However, it says that if pilots at superstores and grocery retailers are found to be successful, there will be wider implementations in store networks. .
Trigo’s solutions are currently deployed with some of the world’s leading grocery retailers including Tesco PLC in the UK, ALDI Nord in the Netherlands, REWE Group in Berlin and Cologne, Netto Marken-Discount (also known as Netto) in Utrecht, Israel’s Shufersal (SAE), and Wakefern Food Corp., the largest retail cooperative in the US.
The size and timing of Trigo’s new funding round reflect its investors’ confidence in its future. Global retail technology funding decreased 43% quarter over quarter to $13.2 billion in the second quarter of 2022 and quarterly transactions fell 21% to 710, according to CB Insights. At $6.7 billion, total mega round funding ($100 million + deals) accounted for just half (51%) of retail tech dollars invested in Q2, a sharp decline of two-thirds (69%) in the first quarter of 2022, and the lowest share in 2 years. Mega-round activity continued to fall in the second quarter, falling to 32 deals from 61 in the first quarter of 2022.
CB Insights notes, however, that the store management technology segment saw an increase in funding during the second quarter with a 25% quarter-on-quarter increase to $3bn compared to $2.4bn in the first quarter. The 2022 year-to-date total of $5.3 billion has already exceeded $4.1 billion in total financing for all of 2020. The average size of store management deals during the first two quarters of 2022 was of $43 million.
Customers are returning to shopping in physical stores, demanding the same convenience and product availability they experience online. “Physical stores should aim to make the shopping experience an enjoyable lifestyle activity that goes far beyond today’s uninspiring offerings,” says Shay Ziv, vice president of marketing for Trigo. The future of retail is a fusion of the online and offline worlds with a focus on connected, convenient and great end-to-end experiences.