Insight, a consumer packaged goods platform that provides AI recommendations on how to price, distribute and promote their products in physical stores, today raised $19 million in Series A funding from Newroad Capital and M12 from Microsoft Corp. The venture arm. Co-founder Shaveer Mirpuri said the funding will build a team of industry experts to help shape customer onboarding, product initiatives and expanded behavior.
Mirpuri and Jonathan Reid started Insight believing there was a large addressable market for brick-and-mortar sales revenue growth management software. Authentic retailers – and by extension brands – face huge challenges in this area, especially as the economy slows. According to NPD, more than 80% of US consumers said in May that they will control product spending in the next three to six months. Major retailers like Walmart and Target have cut their sales and profit guidance in response, reflecting the struggle to move inventory out of warehouses.
“Brands have a fundamental business need to achieve strong influence, collaboration and execution with major retailers. In strategic portfolio design, budget planning, allocation, location, pricing and trade finance strategies to produce answers that always need to be answered effectively and quickly.” They need ways – Mirpuri. “The pandemic has exacerbated the need for greater transparency in decision-making due to constant changes and dynamics in purchasing behavior and manufacturing.
That’s where Insight comes in. The platform – hosted in the customer’s cloud environment – aims to help brands make product and inventory assortment and pricing decisions across all retail stores using data from different retailers, sales, supply chains and market segments. Insight integrates the data to create simulations for optimized placement and promotional plans, attempts to predict the performance of each product, store and day of the week, and provides explanations for factors affecting demand and price elasticity.
Several startups from different directions, such as Hivery, which sells software that optimizes product placement on store shelves, are approaching the same problem. Cosmos software analyzes foot traffic to help retailers create marketing campaigns. There’s a lucky one that provides insights into real-time inventory distribution and discovery.
But Mirpuri sees consulting firms as Insight’s primary competitor — a competitor he argues falls short on many fronts.
“Consulting firms for consumer brands make single engagements a slow and costly process. Current category and revenue growth management tools are afterthought add-ons to data providers and lack predictive capabilities,” Mirpuri said. Focused performance needs are not scalable to complexity and are limited to working with the resources necessary to deliver truly powerful insights and decisions…”
Whether or not this is the case depends on the consulting firm in question and their clients. But Mirpuri’s sales volume aside, he said, was enough to win the business of more than two dozen clients, including 10 of the world’s largest 30 consumer brands.
Mirpuri declined to share revenue figures. But Insight said it plans to double its headcount in the next 12 months as the company’s headquarters prepares to open a new office in Bentonville, Arkansas.
“As consumer shopping behaviors, economic uncertainty and post-pandemic supply chain issues present new challenges to brands every day, the need for a fast and comprehensive category management solution is more important than ever,” said Mirpuri. “We see it as it is [the] Choice Solution”
A headwind that Insight could overcome could extend financial uncertainty well into next year. Global investment in retail technology fell 11 percent to $23.8 billion in Q1 2022, compared to $26.6 billion in Q4 2021, according to CB Insights. While store management technology saw its funding increase by 10 percent quarter-over-quarter to $2.3 billion, it remains to be seen whether it will be a sustainable trend.
M12 partner Abhi Kumar, on the other hand, believes Insight is in a position of strength. The company currently manages more than $80 billion in revenue for its clients and makes decisions on nearly 20 billion products.
Insight AI Board Member and M12 Partner Abhi Kumar said, “Insight AI is the ‘magic’ that algorithmically shapes the trade between the world’s best-selling products and the world’s best-selling retailers. “At M12, we invest in industry disruptors, and we strongly believe that Insite AI is the leading innovator of AI and data to help consumer brands win by enhancing collaboration with their retail channels. Insite AI has transformed category and revenue growth management for consumer brands.”