Seattle-based Shelf Engine has secured US$ 12M in a funding round led by Garry Tan’s Initialized Capital and GGV Capital. Other participants in the investment include Foundation Capital, Bain Capital, 1984 Ventures and Correlation Ventures.
Capital raised will be used to increase the headcount of the engineering team and its sales and acquisition process.
Shelf Engine provides an automated prediction engine that recommends what to order every day. It uses machine learning to help grocery stores bring in their orders to minimize waste and maximize profits. The idea is to remove inefficiencies out of the ordering system. It is very well known that about a third of food gets thrown out of the bakery section and other highly perishable goods remain stocked on store shelves. Shelf Engine procures data about how much sales a store usually sees for particular items and then predicts demand for these products. The company makes money off of the arbitrage between the cost price of goods bought from vendors and the selling price of the same purchased by grocers.
It allows groceries to reduce the wastage of food and have a wide-ranging variety of products on shelves for customers. Shelf Engine assures sales for the store and to pay for any items that remain unsold.
The startup was founded by Stefan Kalb and Bede Jordan in 2015. They were on a ski trip outside of Salt Lake City about four years ago when the idea of tackling the problem of food waste in the U.S. struck their mind. Kalb is a serial entrepreneur whose first startup was a food distribution company called Molly’s, which was acquired by a company named HomeGrown back in 2019.
A graduate of Western Washington University with a degree in actuarial science, Kalb says he had a vision of starting a food company that makes an impact in the world. The problem that Kalb and Bede, a former Microsoft engineer, are dealing with at Shelf Engine may have even more of an effect on the world than what Molly’s, which promoted healthy eating, did.
Food wastage has been a massive problem in the U.S. and is also harmful to the environment. Shelf Engine firstly went to market with a product that it was hoping to sell to groceries, but found it more empowering to become a marketplace that would create models on how much of a particular item needs to go on store shelves. The co-founders’ next goal is to get understandings about secondary sources like imperfect produce resellers or other grocery stores that work as an outlet.
Initialized Capital is a venture capital fund founded in 2011 and headquartered in San Francisco. It had raised more than US$ 500M in funds till the year 2019. Multiple startups backed by them have become “unicorns” valued above US$1 Billion, including Coinbase and Instacart.
GGV Capital is a global venture capital firm that funds seed-to-growth stage investments across Consumer/New Retail, Social/Internet, and Enterprise/Cloud and Smart Tech sectors. The firm was launched in 2000 in Singapore and Silicon Valley and manages US$6.2 Billion in capital across 13 funds. GGV’S Managing Director Hans Tung is a part of Shelf Engine’s board of directors.
