Zippin: Empowering Shoppers by Eliminating Checkout Lines
Scrum Ventures￨Why We Invested￨Zippin
By: Ryan Mendoza, Akash Bhat
Zippin, the startup enabling brick and mortar retailers with cashierless checkout experiences , recently announced their $12M Series A funding round. At Scrum Ventures, we are excited to participate in the latest round along with Evolv Ventures (backed by Kraft Heinz), SAP.iO, Arca Continental, Norma Research Institute and NTT DOCOMO Ventures and look forward to working with the entire Zippin team as they look to further transform the retail industry.
We’ve been interested in the retail sector for quite some time with investments in online retail including ThirdLove (just opened a brick and mortar popup), LeTote (recently acquired Lord and Taylor stores), and ScentBird. Yet, while the online shopping experience has evolved rapidly over the past years, the offline experience has not, leaving a lot of potential for change and improvement to keep up with the needs of modern-day consumers. The fact that the innovative online retail startups we’ve invested in are exploring the brick and mortar space is a case in point.
No doubt online shopping offers great convenience. But it is still important to many customers to try items out before purchasing, and many people simply enjoy perusing things to buy on the spot for fun. However, recent surveys have pointed to the fact that consumers still want a more modern or streamlined purchasing experience with “73% of shoppers saying they prefer retail self-service technologies, such as self-checkout, over engaging with store associates.”
The reason Zippin caught our attention is that their whitelabel modulars and seamless checkout bring the ease of online shopping to retail stores at a reasonable price. Shoppers simply check in when they enter, pick out what they want, and walk out. And because the technology is modular, it can be installed in just 2 weeks in pretty much any high traffic area beyond regular retail such as stadiums, airports, and theme parks.
Spotlight on Retail: Digital Payments Empower Shoppers and Brands
The 2018 successful launch of Amazon Go was just the beginning. While the total in-store retail sales growth at 3.4% is dwarfed by an impressive 16% growth rate in online retail sales, the total revenue of in-store retail is $152.7 billion, compared to the $62.5 billion of e-commerce activity.
Online retail has not fully penetrated into the SMB sector as only about 28% of small businesses make their sales through the internet. We at Scrum don’t just view Zippin as an opportunity for retailers to increase footfall, reduce wait times and enhance the shopping experience, but are also betting on the foundation that the technology is being built on — digital payments.
Going digital allows retailers to receive accurate, detailed insights into customer behavior which helps with product planning and better service. As we look at the future of transactions, it’s geared towards empowering the shopper with a cash-less, cashier-less and frictionless experience, while empowering brands to fully understand their customers and their behavior within the walls of retail spaces.
Why Zippin Will Succeed: Team, Technology, Price and Traction
While Zippin was certainly not the first to offer an automated check-out experience, we believe that the company is well-positioned for success for several factors including their innovative technology, competitive pricing that democratizes the cashierless experience, and proven track record.
- The Technology: Computer Vision, AI and Sensor Fusion Increases Accuracy
Zippin is focused on building cashierless checkouts for brick and mortar retailers and brands through a combination of computer vision, artificial intelligence and sensor fusion technology.
While other competitors in the space only use computer vision, Zippin augments cameras with sensors to deliver higher accuracy than others at lower total cost.
- Price: Democratizing the cashierless experience
Zippin addresses a misconception in the industry that technologies that drive the future of society come with a price tag. Amazon Go costs $1M to implement in a single store, making it an innovation only for elite brands. Other startups launched services similar to Amazon Go, such as Standard Cognition and AiFi, but they struggled with long sales cycles and high operation costs that led to low adoption.
With Zippin, pricing is only $20K to $100K, positioning their technology as a game changer for mass adoption. And even at the lower price point, Zippin uses both computer vision and shelf sensors that give better accuracy than competitors. Zippin was smart to choose a modular store strategy to gain traction in the marketplace while working on unbundling automated checkout technology for retailers of all sizes.
- Early Traction: NBA’s Sacramento Kings
Zippin already has a contract with NBA team Sacramento Kings indicating that they can expand to other stadiums in the U.S.
But one of the main factors in our investment decision was the phenomenal team at Zippin, led by CEO Krishna Motukuri and CSO Motilal Agarwal. We were extremely impressed by both Moti, who brings strong technical capabilities to the team, and Krishna, who has an impressive background in ecommerce having founded several companies within the sector (leading one startup to an acquisition with Lulu’s purchase of uGenie) and served as CEO of the Ecommerce group at Naspers. The team’s deep market insights, technical background, and strategic thinking are essential to the success of Zippin.
At Scrum Ventures, we believe we have clear synergies with our connections to Japan and our work in the sports world (see Sports Tech Tokyo) and are excited to see Zippin in a store near us and much more.
