Seattle startup quickly lands $100 million to help grocers fend off Amazon and other e-commerce players
Swiftly, a Seattle startup that provides software to brick-and-mortar grocery retailers like Family Dollar and The Save Mart Companies, raised $100 million in a Series B funding round.
Swiflty’s technology powers grocery-branded apps that allow shoppers to find items in the store faster, quickly recall past purchases, scan products for checkouts with their phone and skip long lines waiting at the checkout. In many cases, consumers can also schedule home deliveries, especially for items they cannot find on store shelves. Customers can also arrange to pick up their groceries curbside.
The company, which has its technology in approximately 10,000 stores, also sells advertising to major CPG brands on its platform.
Swiftly declined to provide an updated assessment.
The new funding comes as grocers race to adopt technologies that will give them a fighting chance as Amazon and other e-commerce giants deepen their stake in the grocery sector, and customers increasingly expect the kinds of e-commerce technologies they have relied on. during the pandemic.
Amazon announced last week that it would close 68 of its brick-and-mortar outlets, mostly bookstores and general merchandise stores, and focus on its grocery business which includes more than 500 Whole Foods stores and about two dozen grocery stores. Amazon Fresh locations. The tech giant is putting more and more pressure on conventional grocers with the introduction of cutting-edge technologies that provide convenience to customers while allowing physical operations to be run with fewer employees.
Swiftly CEO Henry Kim said his company is trying to ease that pressure by providing brick-and-mortar retailers with, among other software, phone apps that combine the benefits of e-commerce and on-site shopping.
The goal, he said, is to help “those traditional grocers in America compete fairly against the big players.”
Retailers can use the apps powered by Swifly to adopt additional business models pioneered by Amazon and other e-commerce heavyweights. This includes leveraging customer data to recommend certain products as well as to monitor inventory and consumption trends. The data is also commonly used to launch targeted loyalty programs and reap advertising revenue that was, until recently, only within reach of Amazon and Walmart.
Online grocery shopping is estimated to have increased fivefold during the pandemic. Although the vast majority of grocery shopping – around 90%, according to Swiftly – still takes place in physical stores, experts note that new consumer habits are proving sticky, even as authorities ease pandemic restrictions and that ‘it is perceived as safer to venture into supermarkets again.
Datassential, a Chicago-based food industry data analytics firm, said in a recent report that 74% of consumers “believe technology will make shopping easier and remove sources of annoyance, like long lines at the cash register”. Additionally, the report states that more than 40% of consumers say they like digital payment options, illustrating the opportunities to capitalize on these younger consumers as their purchasing power increases.
Now, traditional grocers who do not embrace new e-commerce technologies risk losing significant market share.
To complicate matters, experts said consumers now expect a mix of conventional and newer, technology-driven shopping experiences. For example, some may venture into supermarkets for items like condiments, fresh produce, and meats, while sometimes placing curbside pick-up orders or having heavier items delivered like bags of pet food or cat litter. These same shoppers will use their mobile apps to place home delivery items for anything they can’t find on the shelves.
“Over the past two decades, most physical businesses have been hobbled by legacy digital systems that no longer serve them,” Wormhole Capital’s Vivek Garipalli, who led the funding round, said in a statement. “Add to that the rise of the retail giants who have taken market share category by category, and it becomes clear that it is time for change.”
A host of other companies are branching out into the so-called “foodtech” industry, offering touchscreens for ordering food in restaurants, smart grocery carts, mobile apps, ways to collect and analyze consumer data, and AI-powered backend inventory tracking and delivery. systems. Seattle-area startups in the space include Shelf Engine and Veeve.
Venture capitalists, driven in large part by pandemic market conditions, have invested heavily in food-tech startups over the past year, focusing primarily on two categories: online grocers, as well as apps and online marketplaces, according to PitchBook.
Some of the biggest examples of capital injections into the foodtech sector include the $1.5 billion round of fast grocery delivery service Gopuff in December, as well as the delivery service of British food company Deliveroo, which raised $2.1 billion in its IPO on the London Stock Exchange.
Swiftly was founded in 2017 by Kim, Sean Turner, Karen Ho and Daniel Kim. They are veterans of Symphony Commerce, whose customers included Pepsi, General Mills, Campbell’s, Hershey’s and Kraft. The company started in Palo Alto, California, but later moved to Seattle, where 70% of its workforce is based.
Swiftly, which launched in 2017 and previously raised $15.6 million, plans to use the latest capital to hire around 150-200 additional staff, including engineers, sales reps and marketing managers.
Other Series B investors include Liquid2 Ventures, Bramalea, Gaingels, Silicone Ventures, Proof VC, Western Technology Advancements, Sand Hill Angels and The Martin Family.