Changing Retail With Intelligent Decision Automation
As Rubikloud announces its Series B financing, we thought of sharing more colour on why we feel the company is positioned to become the new leading vendor of retail intelligence — and ultimately why we backed co-founder & CEO Kerry Liu and his team for their next phase of growth.
i. An inflection point has been reached
Few industries have gone through the same level of transformation as retail did over the last 10 years. We’ve observed the dominance of data-driven retail platforms such as Amazon and Alibaba create a vacuum forcing traditional retailers to either embrace new technologies or fall into irrelevancy. This urgency to catch up combined with recent breakthroughs in machine learning drives a massive opportunity for a new third party vendor to emerge as the category king of data-driven solutions required to compete in the modern arena.
We’ve seen these types of market pulls for applied AI through other portfolio companies such as WorkFusion, Clearpath and Ross Intelligence (to name a few) and are stoked to have found a new one in another huge market — global retail.
ii. Deep domain expertise is table stakes when selling to enterprise
Another thing we’ve learned is that enterprise customers are not willing to pay to train someone on their dime. This was true in SaaS and is also true with AI. In other words, the teams that can win executives’ trust, minds and budgets are the ones who best understand the inner workings of the underlying industry they sell into.
This is a shared belief at Rubikloud, where deep expertise in both retail *and* machine learning is built in every function/level of the organization. It also reflects the company’s ability to tap into strong relationships within the Toronto-KW corridor to secure access to world-class talent needed in those two areas. Overall, we’ve been impressed by Kerry’s ability to navigate complex commercial relationships early on, sell to large customers, attract strategic partners (eg. Intel, Microsoft) and surround himself with strong experienced leaders that complement his skillset.
iii. Vertical stack for the win
We believe that vertical AI stacks will tend to overperform relative to horizontal ones over the next 5–10 years. During this time frame, we will see a new set of flagship technology companies emerge as category leaders — companies that will be laser focused on solving specific problems. In other words, the current state of narrow AI technologies will continue to create massive commercial value, while we will have to wait for the next waive before seeing generalized AI scale elegantly across multiple use-cases.
Here again, we’ve found that Rubikloud’s vertical strategy resonated with our thesis for applied AI. At a high level, the company sells an enterprise platform that sits on top of its customers existing system of records, connects siloed data sources (CRM, POS, ERP, etc.), centralizes that data in a data lake and uses machine learning to help merchandisers and loyalty programs managers make better decisions.
We feel that the value from this stack is greater than the sum of its parts — it is Rubikloud’s proprietary retail data model and scaling features that enables its highly engaging SaaS applications which in turn transform data into knowledge and knowledge into improved top and bottom line results.
iv. Momentum
There are roughly 250 tier 1 retailers (defined as >$3.5Bn/yr revenues) worldwide who spend about $40M/yr on use-cases addressed by Rubikloud’s products. It is the sheer size of these accounts combined with a certain level of FOMO that is creating huge tailwind for the company and enabling rapid growth.
The next phase of evolution for Rubikloud will be about stepping on the gas with sales & marketing to accelerate into the opportunity and keep expanding within massive accounts.
A large part of our efforts going through our investment process has been spent talking to dozens of executives at large retailers in our network. Time after time, we’ve felt incredibly lucky to build a community of experts that can provide invaluable inputs to help inform our thinking, and also facilitate introductions to accelerate sales.
Partnering with visionary founders is a truly unique feeling and a privilege. We look forward to leveraging the trust, alignment and transparency that we’ve built with Kerry and his team over the last few months and be part of another great journey.
