Simbe Robotics Inc., maker of the Tally retail robot, disclosed two funding deals today. The first is a $26 million Series A led by Venrock with participation from Future Shape, Valo Ventures, and Activant Capital. The second is an inventory financing agreement with SoftBank Robotics to fund the manufacturing of the next 1,000 Tally robots over the next two years.
Using computer vision and RFID scanning, Tally autonomously moves around stores, providing retailers with insights into shelf data up to three times per day. The mobile robot can track inventory and identify product placement, presentation, pricing, and availability.
San Francisco-based Simbe Robotics, founded in 2014, is also getting some notable additions to its board:
- Tony Fadell: iPod inventor, iPhone co-inventor, and Nest founder. Fadell is now principal at Future Shape, an investment and advisory firm.
- David Pakman: A partner at Venrock, he led the Series A and B rounds and sat on the board of Dollar Shave Club, which was acquired by Unilever for $1 billion. Pakman also oversaw Venrock’s investment in Nest, which Google bought for $3.2 billion in 2014.
- Ryan Gembala: Managing partner at Pathbreaker Venture
Fadell was an early, quiet investor in Simbe Robotics. Brad Bogolea, co-founder and CEO of Simbe, told The Robot Report that Fadell had experienced firsthand at Nest some of the retail problems that Tally can solve.
“Nest was buying end caps at stores across the country and dealing with poor merchandising execution,” said Bogolea. “World-class product leaders like Tony can take their prior hat off and step into any business and add value. He’s been a fantastic sounding board when thinking about global product roadmap and setting up manufacturing and supply chains.”
Simbe Robotics scaling operations
The new funding and board additions will help grow the team and scale operations worldwide. The Tally robot is currently deployed in more than 12 of the top 250 global retailers worldwide, including Schnuck Markets, Giant Eagle, Decathlon Sporting Goods, and Groupe Casino.
“We’ll look to expand more internationally, and SoftBank will be super helpful in that process,” said Bogolea. “Much of this is focused on us doubling down, extending the hardware platform to support international markets, and scaling the data platform for minimum time to value. But we are still hyper-focused on value of in-store visibility.”
Simbe Robotics partnered with SoftBank Robotics (SBR) in early 2018. SBR said it has deployed more than 25,000 robots worldwide and has the infrastructure to support Simbe’s global expansion needs. Bogolea also told The Robot Report that SBR is re-selling Tally in Japan.
“SoftBank is the first official reseller of the end-to-end Tally solution,” he said. “It speaks volumes to the maturity of the product to deploy it halfway around the world and have someone else sell it.”
Sales-oriented ‘revenue monster’
Running a robotics startup is hard. Running a robotics startup that sells into the retail sector, which is under huge pressure and is generally a low-margin business, is even harder. Simbe has remained lean and scrappy to get to this point.
“Many robotics companies think of themselves as robotics companies,” said Pakman. “Simbe thinks of itself as a data company that just happens to make a mobile robot. A lot of robotics companies are built by roboticists who just want to build robots. Brad’s a revenue monster. He’s very sales-oriented.”
According to a 2018 IHL Group study, retailers lose more than $1 billion due to out-of-stock inventory. “Retailers know what comes in stores, they know what goes out of stores, but they don’t know what’s in stores,” said Pakman. “It’s a hard problem and a big one. Once you put stuff on a self, there’s no sensors.”
Amazon’s Go stores appear to have better insight into what’s on shelves compared to traditional retailers, but The Information reported that the rollout of the stores has been slower than originally planned.
“Labor forces turn over frequently, and you want to automate the retail tasks people don’t want to do,” Pakman said. “Walking aisles with iPads to see what’s missing is not a task folks want to do.”
Pakman acknowledged the struggles of brick-and-mortar retailers, which is Simbe’s focus at the moment. But he said the categories Simbe is focused on are more protected than others.
“Grocers and drug stores still have same-day demand,” he said. “But they better have what you want if you decide to go to the store. There’s tremendous pressure to not be out of stock. It’s a loyalty issue and a battle against online shopping.”
from The Robot Report