Seattle’s Swiftly, a grocery tech startup, raises $100M

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Retail software provider Quickly has raised $100 million in a Series C round of funding. This helped the company become the most valuable startup in Seattle to achieve a $1B valuation.

This round was led by BRV Capital Management in Hong Kong. It marks Swiftly’s second $100m financing round in six months.

Swiftly supplies brick-and-mortar retailers with branded phone applications that help them collect valuable customer data, increase advertising dollars, and improve the shopping experience for their customers. These apps allow consumers to scan products with their smartphones and pay for them.

Swiftly was founded in 2018 and has captured approximately 10% of the country’s grocery market, according to Sean Turner the company’s chief technology officer. This 150-person startup has 22,500 stores that are owned by companies earning $1 billion or more annually.

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Turner said, “Our onboarding team is working as fast as possible,” Turner, who co-founded Swiftly with fellow Symphony Commerce veterans Henry Kim (Swiftly CEO), Karen Ho, and Daniel Kim.

Swiftly-powered apps collect data that is used to sell high quality advertising to food brands competing for customers’ attention. Turner stated that it helps brick-and-mortar grocery stores gain ground against ecommerce giants like Amazon and Walmart who are investing heavily in their own grocery-related services.

Instacart, the delivery giant, is another competitor. On Monday introduced Connected Shops, a set technologies that “help grocers create a unified seamless, personalized experience both online, and in-store.”

Swiftly will make use of some of the funding to expand beyond its grocery business. Swiftly is focusing on brick-and mortar stores that sell home goods, home improvements, and fashion, as well as sporting goods.

The company is still primarily active in the grocery sector and offers a range software that uses AI to track consumer trends and monitor inventory.

Turner stated that this business is the only one that is growing. A variety of macroeconomic and social shifts are responsible for the growth.

Turner stated that millennials took up cooking home-cooked meals for the first times during the pandemic. These young professionals were far less likely to eat out than they were before.

Turner stated that “a whole generation learned to cook during the pandemic.” He also said that young shoppers are flocking to grocery stores in greater numbers.

Consumers of all ages were forced to reconsider their trips to restaurants and instead go to the grocery store due to rising inflation. Turner stated that they are preparing a disciplined shopping list and even factoring in sky-high gasoline costs when planning their shopping trips. They are now slashing in ways that they haven’t been since last year when they arrive at the store.

Turner stated that “Grocers are experiencing record sales”, but that they’re also selling fewer units because of inflation.

Turner stated that people are increasingly spending less to buy more, and they’re turning away from premium brands of food and instead relying on discounts and sales through apps.

Swiftly’s customer shopping information helps shoppers create grocery lists, find deals, and save money — all while generating advertising dollars for the retailer.

Turner stated that the phone apps “make it as simple as possible to plan (shopping trips) trips” and also offer grocers “the exact same tech capabilities as The Big Three,” which is a nickname for Amazon Target Walmart.

Retailers have become hugely successful in calibrating advertising with consumer data. Boston Consulting Group projects that such advertising revenues will rise to $110 billion by 2026 and produce profits of $75 billion.

Some of this data has been collected by grocery stores from loyalty cards. Walmart, Target, and Amazon have all been able to leverage precise ecommerce data to determine what a single customer buys. These e-commerce giants use data to create highly targeted advertising that offers similar products to consumers.

Turner stated that Amazon’s e-commerce giants have a strong advantage over brick-and-mortar stores because of its consumer data. He said that Amazon can rely heavily on its growing advertising revenues, while simultaneously investing tens to millions in its e-commerce infrastructures and logistics infrastructures.

He said that Amazon won’t need to make money selling products if they don’t. “They’ll be able offer lower prices and a better customer service.” It’s crucial for grocers that they have a technology platform that can compete with Amazon.

Turner stated that grocers who are notoriously slow to adopt new technology are now eager to use software that will put them on the same level as Amazon.

The pandemic’s initial year saw a surge in e-commerce revenue as people, who were kept inside their homes by COVID-19 lockdowns and turned to their computers to shop. One of the most difficult economic problems caused by the pandemic was whether the new e-commerce shopping habits of consumers would be able to survive once the virus had been contained and shoppers returned to the grocery shop.

Turner stated that today, more than 80 percent of retail transactions are done in-store, and 90 percent of grocery shopping is done in-store, rather than online.

Turner stated that the pandemic surge in grocery orders was a result of “a temporary blip in consumer behavior”.

He said, “You would believe nothing happened.”

Swiftly joined the ranks of nearly 20 other “unicorns” in Seattle who have crossed the $1B valuation threshold in recent times with Monday’s announcement.

Kim stated in a statement that “our mission is to enable brick-and-mortar merchants to move from analog into algorithms.” Kim also said that the winners in this new era in commerce will be determined by their ability to reinvent their business in order to capture shoppers digitally, and then monetize those digital connections.

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