Welcoming Caper to the Lux Family
Grocery shopping is a weekly ritual for millions of Americans, and an experience that’s been largely untouched by technology. It’s a big business too — representing one of the largest and most frequent consumer expenditures (ahead of education, entertainment, and insurance) — totaling over $700B annually.
Grocery is also a category on the cusp of change. Amazon’s market entry through its purchase of Whole Foods and launch of Amazon Go stores has put new pressure on traditional grocers to innovate. Rising labor costs challenge an operationally-intensive business. And online grocery shopping — while still a small percentage of overall sales — is counterintuitively increasing pressure on in-store infrastructure, since most orders are fulfilled through existing stores. Grocers are actively seeking ways to modernize their offerings to serve digitally-savvy and time-conscious customers.
We’ve seen a number of startups targeting this sector, with most promising some instantiation of an Amazon Go-style checkout experience enabled by whiz-bang whole-store sensor technology. Aside from the fact that it’s an extremely difficult problem to solve (most stores carry over 30,000 SKUs across an average of 40,000+ square feet), it assumes that checkout is the only problem to solve, and one that grocers are willing to spend a fortune on.
Caper started with a different question: what solution is best for stores? The answers were clear:
- A system that can deploy quickly and inexpensively to many locations…
- …with no major changes to store infrastructure or operations…
- …that generates a quick return on investment…
- …and delights shoppers while improving their entire shopping experience, including checkout.
This is how Caper’s first product — the Caper Smart Cart — was born. Its screen and suite of sensors turn the mundane into the magical, guiding shoppers along their entire journey to help find products in store, recommending new items, alerting them to discounts, and making checkout a breeze. The approach has a number of advantages: It’s simple and affordable to deploy, as grocers are already used to managing carts and don’t need to upgrade an entire store at once; It enables a more efficient and productive use of human resources to help customers in-store instead of at checkout aisles; It’s a familiar experience for shoppers, yet one that’s immediately engaging and drives new purchase behavior; And by constraining the computer vision challenge to the controlled environment inside the cart — as opposed to the unstructured and highly varied environment of stores — the company greatly simplifies and expedites the technical challenges of automatically recognizing items.
The Caper team’s intense customer focus, compelling business model + traction, and incredible scrappiness is what ultimately convinced us this was the right company to bet on. When we first met founders Lindon Gao and Ahmed Beshry, we were hard-pressed to believe they could deliver on such a complex hardware and software system with just a few million dollars in funding. Then they invited us to visit a production deployment inside the unforgiving environment of a New York City grocery store. We watched real-world shoppers grab their groceries in a New York minute. The store owner had clear love for this team that truly understood his business, and couldn’t stop raving about the Caper cart. Needless to say we were impressed, and then the team did us one better: disclosing commercial deployment contracts with some of the largest grocers in North America.
We’re pleased to announce Caper’s $10M Series A financing, led by Lux and joined by existing investors First Round Capital and Y Combinator. The company also attracted several large grocers as new investors — a testament to the value the company is bringing to the industry. Caper joins a number of NYC-based companies in the Lux portfolio at the intersection of the digital and physical worlds, including Latch, CTRL-labs, Drone Racing League, and Looking Glass.
Over the coming year, Caper plans to deploy over 1,000 carts to grocers across the continent. With nearly 40,000 stores in their sights (and perhaps a few other ideas up their sleeves), the Caper team is just getting started and we’re thrilled to be joining them on this journey to “Make Shopping Magic”.
