EQT Ventures, Initialized Capital, CRV and Y Combinator have fueled Standard Cognition with another $35 million to help retailers battle Amazon. The deal values the San Francisco-based autonomous checkout startup, founded in 2017, at $535 million.
Standard Cognition implants its AI-powered computer vision platform, which enables the autonomous checkout process, in brick-and-mortar stores. To date, the company has installed its hardware in five stores in the U.S. and Japan, with plans to expand globally using the new investment. Standard Cognition co-founder and chief operating officer Michael Suswal tells TechCrunch the company is counting on support from European VC firm EQT Ventures, which led the deal, to launch its technology in Europe.
Here’s a breakdown of the Standard Cognition autonomous checkout experience: A customer walks into one of Standard Cognition’s partners’ stores and one of 27 overhead cameras (more or less depending on the size of the store) will identify you by shape and movement, not facial recognition. The customer then opens the company’s iOS or Android app and a special light pattern flashes, allowing the cameras to tie you to your account and payment method. Finally, grab whatever items you need and leave the store. No checkout is required for Standard Cognition to bill you. It even works without an app: Shop like normal and then walk up to a kiosk screen, the cameras identify what items you have chosen and you can pay with cash or credit card.
News of Standard Cognition’s Series B comes shortly after Amazon confirmed plans to open three additional Amazon Go stores, the e-commerce giant’s cashierless convenience stores. Amazon opened its first Amazon Go store in Seattle in 2016, though Standard Cognition, which operates only one branded brick-and-mortar store of its own, was first to plant roots in San Francisco. Standard Cognition, however, has no plans to open any more of its own stores because “running stores takes a lot of effort,” said Suswal. Instead, the company plans to bring its cashierless experience to other retail chains with the fresh funds.
Standard Cognition announces its Series B financing just eight months after closing a $40 million Series A. Suswal, justifying the lightning-fast growth, said 2019 has been Standard’s “year of deployment,” next year will be “the year of repeatability” and 2021 will be “the year of scale.” The company has raised a total of $86 million in venture capital funding.
“Traditional brick and mortar retailers are caught in a perfect storm,” EQT partner Alastair Mitchell said in a statement. “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. 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.”