Knowing how much and what kind of inventory your brand needs requires a complex web of data that companies often track through spreadsheets or legacy systems that don’t provide a complete picture of the business.
Syrup Tech, now armed with $6.3 million in new funding, feeds all that data, such as transactions, marketing, and inventory, and combines it with other data, such as social media trends and even weather, to spit out predictive inventory recommendations using of artificial intelligence and machine learning. In this way, merchandisers and planners have better information about what they need and can reduce some of the waste.
“I was with McKinsey before and was shocked to see merchandisers spending hours on spreadsheets,” James Theuerkauf, co-founder and CEO of Syrup Tech, told businesskinda.com. “My thought was to let the AI do the math and let the merchandiser make the creative decisions using the AI as a support.”
Theuerkauf explained that forecasting inventory has become more difficult, especially as brands battle stockouts, causing them to overcompensate by ordering more. This can lead to excess inventory and the need to make write-downs, which we saw recently both Walmart and Target have to do to clear their inventories† All that surplus often ends up in landfills.
The supply chain issues are also throwing a key role in the acceleration of inventory management, and Syrup Tech is working to make recommendations sooner rather than later, so if the wait is 40 days, merchandisers should be taking their orders now, or if the wait 10 is. days they can postpone those decisions.
He says Syrup Tech’s customers (currently operating at eight) are seeing double-digit profit margins from reducing stockouts, reducing excess inventory and wastage and saving time by eliminating manual workflows.
“The global supply chain is a bit of a ‘blessing’ as this is now a spotlight on inventory, a lot of interest in figuring this out and a shift from other legacy systems to modern systems,” Theuerkauf added.
The fully third-party company began work on its AI-powered SaaS predictive tool in 2020 and operates in an industry where other stock-focused companies have recently been raising venture capital, including Zipdi and Inventa.
What makes Syrup Tech different, according to Theuerkauf, is that it takes the approach of combining strong prediction action through AI that fits into the workflow of merchandisers. He believes no one would have thought of that for his company.
Meanwhile, sales have increased 14 times in the past 12 months and 2.5 times since early 2022, Theuerkauf said. As mentioned, the company currently works with eight clients, mainly in the fashion footwear sector, and has a waiting list of another five.
The company closed its funding round in June, giving it total funding of $7.3 million. Gradient Ventures, or GV, led the latest round, including Flybridge Capital, Firstminute Capital, Rackhouse Ventures and a group of angel investments from former executives at Adidas, Bonobos, Salesforce, ASOS, ThredUp, Zalando and Stripe. 1984 Ventures, which led Syrup Tech’s pre-seed round last year, also invested.
Theuerkauf plans to use most of the money to expand the company’s 14-strong workforce. He is also looking at product development and adding more use cases. The company focused primarily on in-season merchandise, but is now moving upstream in the pipeline to focus on sourcing and manufacturing recommendations.
The new financing also puts the company in “a solid position for years to come,” he added.
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