Israel-based Trigo is being piloted by a handful of European retailers.
(Bloomberg) — An Israeli startup making technology for cashier-free payment at brick-and-mortar stores has raised $100 million. Trigo Vision Ltd., which plans to announce the financing on Wednesday, will use the cash to help fund its race against Amazon and other competitors trying to let shoppers skip the checkout line.
The company’s systems use ceiling-mounted cameras and software designed to automatically match individuals with what they take off the shelves. The technology is currently in use at six retail stores, including in London and Tel Aviv, and is being tested internally by Wakefern Food Corp. in the US. If the product works the way Trigo and other companies envision, cashiers and checkout stands could one day become obsolete.
Trigo has so far raised $204 million from investors including Temasek Holdings Pte and venture capital firm 83North, which co-led its latest round. The Tel Aviv-based startup has about 200 employees and has so far reeled in $204 million from investors. The company didn’t disclose its latest valuation.
Trigo-powered stores include locations operated by Tesco Plc and Aldi, and are relatively small, ranging in size from about 1,000 square feet to 4,000 square feet. That convenience store-scale footprint is the typical starting point for automated checkout systems. Software can better identify people and products in small, streamlined environments than in large, chaotic supermarkets. But Trigo’s chief executive officer aims to have the company make its mark by retrofitting larger stores where waiting in line takes more time.
“It took a few years to develop the first stores, open the first stores, and we decided that our strategy would be focus on the supermarket,” said CEO Michael Gabay, who co-founded Trigo four years ago. “If you’re going to a small convenience store in the US, with your Coke and your snack, then the need for the product is less than in supermarkets.”
In the race to automate grocery store checkouts, Amazon.com Inc. is likely in the lead. Twenty-six of the new Amazon Fresh grocery stores in the US, which typically have more than 20,000 square feet of shopping space, are equipped with the company’s Just Walk Out technology. Amazon is also trying to sell the system of cameras and shelf sensors to other retailers, with Starbucks Corp., J Sainsbury PLC and a few airport and stadium concessions operators among its customers. But many in the industry are skeptical of inviting Amazon, a fierce competitor, into their stores.
Trigo and a raft of startup competitors including AiFi Inc., Grabango Co. and Standard Cognition Corp., are jostling to fill that gap. The industry generated plenty of hype and investment following the surprise announcement of the first Amazon Go convenience store in 2016, but has since settled into the grind of refining a complicated and unproven technology, and trying to find customers in a low-margin industry where self-checkout stands pass as state-of-the-art.
So far, the technology has fallen short of its more ambitious goals. Amazon, which has been working on Just Walk Out for almost a decade, at one point envisioned thousands of Amazon Go convenience stores. But the project’s expansion has slowed to a crawl in the US, with 28 stores in five metro areas. Amazon in recent years set its sights on the greater London, a city where shoppers are used to pocket-sized markets, and where the company today operates 19 Fresh-branded Just Walk Out stores.
When Trigo raised money in 2019, the company said it planned to deploy its technology in 280 stores run by Israeli supermarket operator Shufersal Ltd. over the subsequent five years. To date, they’ve opened one: a 1,080-square-foot market in Tel Aviv. More are on the way, a spokesperson said.
In addition to its technological hurdles, the technology also faces other challenges: Labor unions have slammed automated checkout systems as an expensive way to engineer away cashier jobs.
Trigo sells its hardware to customers, and charges them a subscription fee to operate the service. Gabay said retailers should expect to recoup that initial investment and see returns a year and a half to two years after deploying the hardware. He declined to disclose its price.
Like Amazon, Trigo is working to add services to its people- and item-tracking system that go beyond checkout, like inventory management or analysis of shoppers’ paths within a store. That information could turn into insights for marketers, store designers or e-commerce operations that depend on knowing exactly what is on the shelf at a given time. Trigo calls its product, still in development, StoreOS. “It’s a gold mine,” Gabay said.
“Retailers and grocery retailers want to be more efficient,” Gabay said. “They all want to continue to develop this technology and to open more stores. This market, it’s here, and it’s here to grow.”
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