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The retail software provider quickly raised $100 million in a Series C funding round, helping the company become the latest Seattle-area startup to reach a $1 billion valuation.
The round, led by Hong Kong-based BRV Capital Management, marks Swiftly’s second $100 million financing round in less than six months.
It quickly delivers brick-and-mortar grocers designed to help retailers collect high-value customer data and earn advertising dollars and improve shoppers’ in-store experience. The app allows shoppers to find what they need in the aisle, remember past purchases, and skip lines by scanning products and paying with their phone.
According to the company’s CTO, Shane Turner, it now controls roughly 10 percent of the nation’s grocery market. The 150-person startup serves 22,500 stores, each operated by companies with $1 billion in annual revenue or more.
“Our passenger teams are working as fast as they can,” said Turner, who founded Swiftline in 2017 with Symphony Commerce veterans Henry Kim, Karen Ho and Daniel Kim.
The data collected by Swiftly-powered apps is used to sell high-quality ads for food products that grab the attention of shoppers. Turner said it helps those brick-and-mortar grocers gain ground on e-commerce giants like Amazon and Walmart, which are investing heavily in their own grocery-related products and services.
Other startups are also developing technologies for traditional grocery stores, such as Veve, a Seattle company that announced its smart shopping cart technology on Monday.
It will quickly use some of the new funding to expand beyond the grocery business into markets. The company has its eyes on brick-and-mortar stores that sell furniture, home improvement, electronics, fashion and sporting goods.
Today, the company continues to operate primarily in the grocery sector, offering a variety of software that uses AI to manage inventory and track consumer trends, in addition to developing consumer phone apps.
That business is only growing, Turner says. The growth is partly driven by social and macroeconomic changes.
Turner said millennials took to mass-preparing home-cooked meals for the first time during the pandemic. Before then, those young professionals were more likely to eat out.
A generation learned how to cook during the pandemic, Turner said, adding that those younger consumers are going to the grocery store in large numbers.
Inflation has also caused consumers of all ages to rethink their trips to restaurants and head to the grocery store instead. They’re making disciplined shopping lists, and spending sky-high gas on their shopping trips, Turner said. Once those shoppers get to the store, they’re eroding in ways they didn’t last year.
“Grocers are seeing record sales,” Turner said, “but they’re selling fewer homes because inflation has driven up the cost of everything in the store.”
People are spending more to buy less, he said, bypassing premium food brands and turning to deals and sales offered through grocers’ apps.
Swiftly’s customer shopping data helps those shoppers find deals and sales items on their shopping lists — all while reaping advertising dollars for the retailer.
The phone apps, Turner said, “make it as easy as possible to plan (shopping) trips” while also providing grocers with “the same technology capabilities of the Big Three,” nicknamed Amazon, Target and Walmart.
Tailored advertising with the help of consumer data has become big business for retailers. The Boston Consulting Group estimates that such ad revenues will rise to $110 billion and generate $75 billion in profits by 2026.
Grocers have historically collected some data from shopper loyalty cards. But Amazon, Target, and Walmart are particularly adept at using accurate e-commerce data to understand what a single consumer buys. Those giant e-commerce companies use high-quality ads to sell companies that offer similar products that consumers may be interested in.
Turner said consumer data has given e-commerce giants like Amazon a huge advantage over traditional brick-and-mortar retailers. Amazon has invested tens of millions in its e-commerce and logistics infrastructure, saying it can rely heavily on growing advertising revenue.
“If Amazon doesn’t have to make money selling things, they can always offer a lower price, a better customer experience. …This makes it extremely important for grocers to have a technology platform that can compete with that.
It also means that grocers, who have historically been slow to adopt new technologies, are eager to use software that Turner says can put them “on the same playing field as Amazon.”
E-commerce revenue surged in the first year of the pandemic as consumers stayed home during the Covid-19 lockdowns. One of the great economic puzzles of the pandemic has been whether consumers’ new e-commerce habits will stick if vaccines halt the spread of the virus and consumers start driving to the grocery store again.
Today, Turner said, more than 80% of retail transactions occur in a physical store rather than online, and 90% of grocery shopping is done in a brick-and-mortar store instead of an app or web browser.
The grocery ordering epidemic is ultimately a “temporary blip” in consumer behavior, Turner said.
“You think nothing happened,” he said.
With Monday’s announcement, Swiftly joins nearly 20 other Seattle-area “unicorn” startups that have crossed the $1 billion valuation mark in recent years.
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