Here is our Q2 2018 summary report on the retail technology startup sector. The following report includes a sector overview and recent activity.
As we previously noted, retail technology has shown consistent growth over the past few years. Now we are taking a more detailed look on our retail technology report and research platform to examine its funding by round. From our analysis, we can conclude that the retail technology sector has been maturing over the past few years.
This conclusion comes from two takeaways:
- Funding amount percentages are shifting to mid and late-stage events
- Funding count percentages are shifting to mid and late-stage events
We’ll explore these takeaways in some more detail below.
To help set the stage, the graphic below highlights retail technology funding amounts over time. As you can see, the sector’s overall funding experienced a burst of growth from 2012 to 2017.
Retail Technology Funding Amount Percentages Shifting to Later-Stage Events
Let’s examine the retail technology funding amounts by round as a percentage of the total, which show changes independent of the total funding amount by year.
The above graph shows that the funding amount percentages in Seed and Series A rounds dropped relative to the other round types. In addition, the funding amount percentages in all the other rounds stayed constant or increased.
Specifically, Seed and Series A funding amount percentages fell by over half from 32% to around 13%. On the other hand, Series C and Late Stage funding amount percentages grew from 24% to over 40% during the same time period.
We see that the funding amount percentages by round indicate a shift from early-stage to mid and late-stage events from 2012 to 2017. Would the funding event count graph show the same trend? Let’s examine that in the next section to find out.
Retail Technology Funding Count Percentages Shifting to Later-Stage Events As Well
The below graph shows the retail technology funding counts by round as a percentage of total events.
This graph supports our previous conclusion from the funding amount graph. In particular, Seed and Series A funding count percentages dropped significantly from 80% to under 50%. The funding count percentages in all other rounds increased by various magnitudes from 2012 to 2017.
Conclusion: Retail Technology Sector Matures As Funding Shifts to Later Stages
In summary, we have seen retail technology funding amounts and events shift from the early-stage rounds to the later-stage rounds. These observations led us to conclude that the retail technology is in the maturing phase.
Here is our Q1 2018 summary report on the retail technology startup sector. The following report includes an overview, recent activity, and a category deep dive.
The Retail Technology sector includes companies that facilitate the operational procedures of retailers. It also contains companies that make it easier to search and shop for merchandise.
What are the different components of Retail Technology? How do they make up this startup ecosystem? On our retail tech research platform, we have classified the companies into 21 categories. This blog post examines these categories and how they compare with one another.
Marketing Platforms Is the Largest Category
Let’s start off by looking at the Sector Map for the Retail Technology sector. As of March 2018, we have classified 1,746 Retail Technology startups into 21 categories. They have raised $59 billion in funding. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.
We see that Marketing Platforms is the largest category with 245 companies. This category includes companies that enable merchants to execute and manage marketing campaigns. It also contains customer relationship management tools used to improve customer engagement. Some example companies in this category include Showpad, Sprinklr, Gainsight, and Medallia.
We have seen the Retail Technology categories and the number of companies in each. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.
Marketing Platforms Is the Heavyweight Category in Retail Technology
Our Innovation Quadrant divides the Retail Technology categories into four different quadrants.
We can see that Marketing Platforms is in the Heavyweights quadrant. Heavyweight categories have reached maturity with large amounts of funding. 11 categories are in the Established quadrant for reaching maturity with less financing.
4 categories are Disruptors, acquiring significant financing at a young age. The final 5 categories belong in the Pioneers quadrant. They are in the earlier stages of funding and maturity.
We’ve now seen the Retail Technology categories and their relative stages of innovation. Marketing Platforms emerges as a key category. It leads in total companies and appears in the Heavyweights quadrant. Yet how does its funding stack up against other categories? Let’s look at the Total Funding and Company Count Graph.
Last Mile Logistics Startups Have the Most Funding
The graph below shows the total amount of venture funding and company count in each category.
As the above graphic implies, the Last Mile Logistics category leads in funding. Its $13 billion in funding is almost 50% higher than the next category, POS Payments.
Last Mile Logistics companies are innovating on the last phase of the supply chain. They work on moving goods from a local retailer to a consumer’s home. Some example companies in this category include Instacart, DoorDash, Bigbasket, and Deliveroo.
Conclusion: Marketing Platforms and Last Mile Logistics Lead the Sector
The graphics above show that Marketing Platforms leads the sector for having the most companies and being a Heavyweight relative to other categories. The Last Mile Logistics category leads the sector for having the most funding.
What are your thoughts on this? Let us know in the comments section below.
The following graph shows the founding year distribution in the Retail Technology sector. The graphic includes data through September 2017.
The above graph summarizes the number of Retail Technology companies founded in a certain year. 2012 ranks at the top with around 242 companies founded in that year alone. 2011 is the runner-up with 224 companies founded in that year.
We are currently tracking 1673 Retail Technology companies in 22 categories across 58 countries, with a total of $54.5 Billion in funding. Click here to learn more about the full Retail Technology market report.
The analyses below summarize where Retail Technology innovations are occurring. The graphic includes data through September 2017.
The above map shows the number of Retail Tech companies located in different countries. The United States ranks as the top country with around 950 companies.
The above map shows the amount of total Retail Tech startup venture capital funding in different countries. The United States has the most VC funding at around $30B.
We are currently tracking 1667 Retail Tech companies in 22 categories across 58 countries, with a total of $54.3B in funding. Click here to learn more about the full Retail Technology startup market report.
The following graphs highlight recent trends in Retail Technology startup funding activity. The graphics include data through September 2017.
The above graph summarizes the total funding raised by Retail Tech startups for each year. 2015 has the most funding to date at around $10.5B.
The above graph summarizes the total amount of funding raised by Retail Tech companies founded in a certain year. Companies founded in 2008 have raised the most funding at around $7.7B.
We are currently tracking 1667 Retail Tech companies in 21 categories across 58 countries, with a total of $54.3 Billion in funding. Click here to learn more about the full Retail Technology market report.