Swiftly, a Seattle startup that provides software to brick-and-mortar grocery retailers such as Family Dollar and The Save Mart Companies, raised $100 million in a Series B funding round.

Swiflty’s technology powers grocer-branded apps that allow shoppers to find items in the store faster, quickly recall past purchases, scan products for checkout with their phones and avoid long lines at the cash register. In many cases consumers can also schedule home deliveries — particularly for items they can’t find on store shelves. Customers can also arrange to pick their groceries up at the curb.

The company, which has its technology in about 10,000 store locations, also sells advertising to top CPG brands on its platform.

Swiftly declined to provide an updated valuation.

The fresh funding comes as grocers race to adopt technologies that will give them a fighting chance as Amazon and and other e-commerce giants deepen their stake in the grocery business, and customers increasingly expect the kinds of e-commerce technologies they came to rely on during the pandemic.

Amazon last week said it will close 68 of its physical retail locations, mainly book and general merchandise stores, and focus on its grocery business that includes more than 500 Whole Foods stores and around two dozen Amazon Fresh locations. The tech giant is increasingly piling pressure on conventional grocers with the introduction of advanced technologies that offer convenience to customers while rendering it possible to run brick-and-mortar operations with fewer employees.

Swiftly CEO Henry Kim said his company is trying to ease that pressure by providing brick-and-mortar retailers with, among other software, phone apps that blend the benefits of both e-commerce and on-site shopping.

The goal, he said, is to help “these traditional grocers in America to compete fairly with the big players.”

(Swiftly Photo)

Retailers can use the Swifly powered apps to adopt additional business models pioneered by Amazon and other e-commerce heavyweights. That includes harnessing customer data to recommend certain products as well as monitor inventory and consumer trends. The data is also commonly used launch targeted loyalty programs and reap advertising revenues that were, until recently, only within reach of the likes of Amazon and Walmart.

Online grocery shopping is estimated to have leaped as much as five-fold during the pandemic. Although the vast majority of grocery shopping — some 90%, according to Swiftly — still takes place in physical stores, experts note that consumers’ new habits are proving sticky, even as authorities ease pandemic restrictions and it’s perceived to be safer to venture back into supermarkets.

Datassential, a Chicago food-industry data analytics firm, said in a recent report that 74% of consumers “believe technology will make shopping easier and remove sources of annoyance, like long lines at the cash register.” In addition, the report said more than 40% of consumers say they like digital payment options, illustrating opportunities to capitalize on those younger consumers as their spending power increases.

Now, brick-and-mortar grocers who fail to adopt new e-commerce technologies stand to lose considerable market share.

Complicating matters, experts said consumers now expect a mix of conventional and newer, tech-driven shopping experiences. For example, some may venture into supermarkets for items like condiments, fresh produce and meats, while occasionally placing orders to be picked up at the curb or having heavier items like bags of pet food or kitty litter delivered to their doors. Those same shoppers will use their mobile apps to place home delivery items for anything they can’t find on the shelves.

“For the past two decades, most brick-and-mortar businesses have been hampered by legacy digital systems that no longer serve them,” Vivek Garipalli of Wormhole Capital, which led the funding round, said in a statement. “Add to that the rise of retail giants who have taken market share category by category , and it becomes clear that it’s time to change.”

A host of other companies are diving into the so-called “foodtech” industry, offering touch screens for ordering food in restaurants, smart grocery carts, mobile apps, means of gathering and analyzing consumer data, and AI-driven backend inventory tracking and delivery systems. Seattle-area startups in the space include Shelf Engine and Veeve.

Venture capital firms, driven largely by pandemic market conditions, have invested heavily in foodtech startups over the last year, focusing largely on two categories: online grocers, as well as apps and online marketplaces, according to PitchBook.

Among the largest examples of capital pumping into the “foodtech” sector were speedy grocery delivery service Gopuff’s $1.5 billion round in December as well as U.K. food delivery service Deliveroo, which raised $2.1 billion in its London Stock Exchange IPO.

Swiftly was founded in 2017 by Kim, Sean TurnerKaren Ho and Daniel Kim. They are veterans of Symphony Commerce, whose customers included Pepsi, General Mills, Campbell’s, Hershey’s, and Kraft. The company originally started in Palo Alto, Calif. but later moved to Seattle, where 70% of its workforce is based.

Swiftly, which launched in 2017 and had previously raised $15.6 million, plans to use the latest capital to hire about 150 to 200 additional employees, including engineers, sales representatives and marketing executives.

Other investors in the Series B round include Liquid2 Ventures, Bramalea, Gaingels, Silicone Ventures, Proof VC, Western Technology Advancements, Sand Hill Angels and The Martin Family.

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