AI-Powered Inventory Management Startup Secures Hefty Series B
Investors keep handing out cash for artificial intelligence-based solutions.
Invent Analytics announced Monday it had raised $17 million in Series B funding, led by LFX Venture Partners and supported by European Bank for Reconstruction and Development (EBRD) and Collective Spark.
More from Sourcing Journal
Gurhan Kok, founder and CEO of Invent Analytics, said the company primarily plans to use the funding to refine the company’s AI-powered technologies, which include forecasting, inventory allocation, pricing and more.
The new funding will help the Philadelphia-based company to better address the nuances that come along with omnichannel, he said.
“More retailers are able to support the behavior of customers in an omnichannel environment, and that also changes the landscape of how inventory flows and how those decisions affect the final outcomes,” Kok said. “We need to continue the innovations [to meet] the expectations of both retailers and customers in the omnichannel area. We can…strengthen the existing solutions we already provide—predicting, forecasting, inventory planning, replenishment, allocation—but also add adjacent solutions to increase the scope of how we support retailers.”
To do so, the company has plans to build out its team further, according to its announcement. Kok did not say what type of positions he plans to hire for in the immediate future.
When a retailer onboards onto Invent Analytics’ SaaS platform, they have to provide simple sales data and inventory data. From there, they can add custom inputs like social media data, segmented customer data, competitor data purchased from a third party and more. Those inputs help the AI solution to create highly intuitive recommendations about products—both at the beginning of the lifecycle and throughout.
He said the need to expand further—and to raise more funding, particularly just over a year after announcing a Series A round—comes partially from customer demand. Kok said the startup anticipates it will repeat last year’s success this year, especially with the new funding to tack on.
“We’d like to double [our customer base]—that’s our plan, and we are on target for it so far this year, and we doubled last year,” he told Sourcing Journal. “We are growing our client base [at] a very quick pace, and that’s why we raised our Series B.”
The company has more than 50 retail clients, and to date, it has focused on selling into enterprises. To date, its big-name clients include Jos A. Bank, Five Below, Men’s Wearhouse and more.
John Seung, managing partner at LFX Venture Partners, said he knows that as supply chain dynamics continue to shift as a result of consumer behavior and brands’ responses, the solution will only become more enticing.
“We’re on a mission to build a better, more efficient and sustainable global supply chain. We chose to invest in Invent Analytics for its innovative AI-decisioning technology and ability to accelerate retailer planning capabilities to create direct bottom-line return on investment,” Seung said in a statement.
Kok said going past forecasting, a capability he calls AI decisioning, is a major point of differentiation for the 11-year-old startup.
The company recently ran a test for a prospective customer, in which it put its technology to the test for a small proportion of the retailer’s stores. When comparing the results to the existing system the retailer had in place—which primarily focused on forecasting and did not account for real-time allocation decisions—Invent Analytics churned profits two percentage points higher than a competitor’s software.
For existing clients, Kok told Sourcing Journal, the company has started to see a net benefit of a 2 to 5 percent profit increase, which he said goes directly to the bottom line.
Because of those kinds of outcomes, Kok said he feels confident the solution will have a strong foothold in the ever-growing landscape of AI companies vying for retailers’ business and investors’ attention.
“Money is expensive now, compared to several years ago. This makes the financial success of retailers more dependent on getting the right inventory levels in their networks,” he said. “Otherwise, they would end up with excess inventory or unmet customer demand, which are both very costly. Because of that…there’s more conviction in the marketplace that AI could help solve or mitigate some of these problems. As a result of these things combined, we see a lot of demand from all segments of retail.”