Aussie AI startup HIVERY has raised $8 million in Series A funding, led by Blackbird, as it makes a grab for a global opportunity helping retailers stock the products consumers really want.
Founded in 2015 and backed by drinks giant Coca Cola, HIVERY uses AI to inform retailers which products should be placed where, and how much they’re likely to shift.
“If you walk into any Walmart store in North America, the chances are if you walk down some categories … it has been our software that helped determine which products go into that store, how much space is allocated to them, and how that differs from store to store across the country,” co-founder Jason Hosking tells SmartCompany.
The idea is to “maximise the profitability of the category for both the retailers and the suppliers”, he explains.
As well as counting Coca Cola and Walmart among its clients, HIVERY also manages a whole swathe of vending machines across Australia, Japan and the US, helping determine which products are popular where, and how much space each snack of fizzy drink should be allocated.
The technology is designed to help retailers respond to trends in the market, Hosking says — something that historically has been done manually, and has been very labour intensive.
Co-founder Franki Chamaki tells SmartCompany HIVERY is designed to help people leverage the “three V’s of data”: velocity, variety and volume.
“We’re helping to democratise expertise,” he explains.
Some 90% of the world’s data was created within the past two years, he notes.
And already, the challenge of optimising retail shelf space is a $900 billion problem.
For a human to create a ‘planogram’, or the optimal in-store retail layout, to analyse and act on all the data involved, can take 33 weeks, Franki says.
The HIVERY tool can do the same thing in six minutes.
“That’s removing human biases that factor into decisions.”
This is a new problem for retailers, he adds, and a big one. And the amount of data available is only ever increasing.
“It’s a problem that is going to continue to grow.”
The time is now
Over the past five years, the startup has been doubling its revenues year-on-year.
And, while like many businesses, the startup has seen a bit of a wobble during the COVID-19 pandemic, it’s still on a “pretty accelerated growth trajectory”, Hosking says.
“We’re in a bit of a transition period,” he adds.
“Some areas of the business have been impacted, while others are accelerating.”
While the vending machine arm of the business has seen a negative impact — people aren’t travelling on public transport, and schools, universities and offices have been closed — the more traditional retail channels have accelerated.
Now, with some funding in the bank and a refocusing of priorities, the founders are forecasting 500% growth in annual revenues for this year.
HIVERY secured some early seed funding from Coca Cola, but it hasn’t taken on any external investment since.
It’s been in R&D mode, Hosking suggests, working to improve retail solutions for companies such as Coca Cola and Walmart.
But, when the team “cracked” its AI solution, suddenly the team was fielding inbound enquiries from some of the world’s biggest retailers.
“We knew we were solving a big problem, but we realised we had built and solved a big problem in a very transformational way,” Hosking says.
“We knew we had cracked something that we needed to accelerate,” he adds.
“Our product was only just emerging, and it needed a whole lot more development.”
It was time to scale the solution and scale the team, and fast, he explains. That would require a funding boost.
“We had to scale this, and the time was now,” he adds.
No time to sit still
Of course, the global COVID-19 crisis has sent business-as-usual out of the window, and made it difficult for many businesses to grow, especially on an international scale.
Fortunately, although it’s only just been made public, HIVERY closed this funding round back in December last year.
“Going into this period of uncertainty with a strong balance sheet was very very helpful,” Hosking says.
Still, over the past six months, as the crisis deepened, HIVERY has not been sitting on its hands. Rather, the team has been focused on product development and innovation.
“We were significantly ahead of the market and our competition in terms of the advancement of our solutions,” Hosking says.
“We did not want to sit still in this period and let those guys catch up.”
At the same time, the startup has been growing, bringing on key hires such as a chief revenue officer and chief technology officer, as well as growing the sales team. At a time of economic crisis, that means a lot.
Being in a strong enough position to protect your employees’ jobs is “one of the proudest moments you can have as a founder,” Hosking says.
“For us to stand up as a founding team and say ‘our business is secure, your jobs are secure, there are no plans to make any redundancies, and by the way, we’re still hiring’ … it’s part of the reward and part of the fulfilment you get as a founder,” he adds.
“It’s been tremendously satisfying.”