Shelf Engine Garners $41M in funding led by General Catalyst

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Shelf Engine has confirmed raising funds to the tune of $41 million in its latest Series B round with a view toward scaling up its automation-based solutions for grocers who are facing issues related to labor, customers and competition. It is already live for 2,000+ grocery stores throughout the country and makes use of cutting-edge statistical models, neural networks and ML (machine learning) for its order automation and forecasting systems. It also ensures the generation of accurate grocery orders, sizably scaling up margins and sales figures, while also lowering food wastage (estimated at 43 billion pounds annually for the industry).

This funding round takes the company’s cumulative funding to $58 million to date and was spearheaded by General Catalyst along with follow-up investors like GGV Capital and Foundation Capital as per sopergeekwire. They were also joined by Founders’ Co-Op, Correlation Ventures, 1984 Ventures, Initialized Capital, Soma Capital, and Firebolt Ventures. This funding round will also help the company invest more in its growing data science, engineering and supply chain automation teams.

Average profits in the grocery business usually stood at the two percent mark in the pre-pandemic era, majorly on account of inefficiencies linked to the supply chain and store side of things. Shifts in demand and skyrocketing sales figures only worsened these problems, with stores doing away with 1/3rd of fresh inventory as well. Over-ordering led to hindered profitability while also forcing retailers to hike their prices in order to offset losses at the same time. According to the CEO and Co-Founder at Shelf Engine, Stefan Kalb, grocers have to swiftly innovate in the current scenario in order to avoid risks for their companies. He talked of how waste is being reduced by the company while enhancing sales figures simultaneously and this is straightway impacting the bottom-line for any grocer.

At the same time, grocers are also earning more money, while being better placed to capture higher market share and offer more attractive pricing. This is more important with many disruptors and leading technology players coming into play across the market. The latest funding round will help the startup meet customer demand to launch across thousands of stores over a period of 18 months. Buyers at leading retail companies usually deploy SaaS and CAO (Computer Assisted Ordering) solutions which necessitate considerable software and hardware investments upfront for inventory management. These solutions do not succeed in accounting for inventory-related data on hand and higher volatility related to sales-based patterns, such as buying related to the weather or pandemic, resulting in time losses and order-related inaccuracies.

Grocers leveraging the company’s solutions for automating orders are benefiting from higher average profit margins to the tune of 50% while also lowering food waste by a whopping 32% too. Through the analysis of sales-based information and historical order data along with accounting for real-world events including schedules, holidays, local weather, events, etc, Shelf Engine is building optimal orders for each product on a daily basis, while also automating the entire submission procedure for orders and lowering stockouts by a sizable 90%. This is helping enhance margins and sales figures alike, ensuring greater mental peace and value for customers. Shelf Engine also guarantees sales for each item that it has under management and also orders for grocers, buying back all products which are unsold. This also does away with inventory-related risks for grocers.

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