The newfound capital brings Standard Cognition’s total raised to date to more than $86 million at a post-money valuation of $535 million. That’s more than double the company’s valuation as of November 2018, notes CEO Jordan Fisher, and it’ll enable Standard Cognition to “continue to focus on making its early customers in the U.S. and Japan successful” while expanding both its team and geographic footprint.
“We really hit it off with the EQT Ventures team, and we’re incredibly excited to have them on board as we enter our next stage of growth,” said Fisher, who founded Standard Cognition in 2017 with six other cofounders, five of whom came from the U.S. Securities and Exchange Commission. “Standard’s initial customer implementations are moving along quickly, and in the coming months we’ll be able to reveal more detail about our work with our global retailers. Feedback from retailers is that Standard’s light footprint, low hardware costs, and fast installation are the main reasons why they are selecting us.”
Like Amazon Go, Standard Cognition adds items nabbed from a display or shelf to a running tab that’s automatically charged to shoppers’ accounts as they exit. The system accounts for mistakes, like when a customer puts back an item they’d initially considered purchasing, and it anonymizes data to minimize the risk of overzealous brands or retailers targeting people’s purchasing patterns.
It’s also capable of preventing shoplifting. Standard Cognition’s AI can recognize telltale signs of theft from behaviors like trajectory, gait, gaze, and speed, all of which it helpfully flags via text message for store attendants. Learning those behaviors wasn’t easy — the bulk of sample data came from 100 actors who shopped for “hours” in a mock setup — but the result is an accuracy rate that’s above 99%.
In September, Standard Cognition became the second company to open a cashierless store in San Francisco, following hot on the heels of Zippin in August. The 1,900-square-foot space at 1071 Market Street lacks a check-in gate — all you need to begin shopping is to check in using the Standard Checkout app — and features dozens of ceiling-mounted cameras, each wired to a networked appliance that performs inference. It’s stocked with snacks, personal care items, and cleaning supplies currently, with plans to expand its inventory over time.
The store serves as a sort of functioning showroom. Standard Cognition is using anonymized data from it to improve its algorithms, and to walk prospective retail partners through live demonstrations. Fisher claims that hundreds of retailers are evaluating the company’s technology and that several have inked deals, including two which are deploying in multiple locations with scheduled go-live dates in Q3 and Q4 of this year. Standard Cognition previously said it plans to roll out its platform in 100 stores a day by 2020.
Standard Cognition directly competes with Trigo Vision, which recently inked a deal with Israel supermarket chain Shufersal for 272 cashierless stores and is reportedly in partnership talks with Tesco, and Zippin, which last August became the first company to open a checkout-free store in San Francisco. That’s not to mention Pandora cofounder Will Glaser’s Grabango, which this year began piloting a “no-wait” brick-and-mortar payment experience at a Giant Eagle store. Amazon is the elephant in the room — its Amazon Go locations across the country employ sensors, AI, and smartphones to streamline retail flows — but even Microsoft is said to be working on cashierless store technology.
Despite the competition, EQT Ventures partner Alastair Mitchell believes Standard Cognition’s market momentum is self-propelling. In any case, its platform will no doubt be bolstered by the January acquisition of Explorer.ai, a seven-person computer vision startup whose technology cuts down the time it takes to map large stores from hours to minutes.
“Traditional brick and mortar retailers are caught in a perfect storm. From the encroachment of behemoths like Amazon into every inch of the market to changing consumer attitudes, as busy people demand an ever more efficient shopping experience, margins are being squeezed like never before,” said Mitchell. “The talented and driven Standard Cognition team have worked quickly to build a product that allows physical retailers, of all sizes, to tackle these challenges. A strong track record, super-smart technology, and bold ambitions for future expansion makes Standard Cognition an exciting investment for us, especially as we look to push forward with our ambition to help US companies break into Europe.”