How European Retail Tech startups are driving the $26 trillion Retail R/Evolution

In partnership with Nauta Capital we have released a brand-new report on Retail Tech: How Europe’s startups are driving the Retail Tech R/Evolution. It’s a deep-dive into Europe’s Retail Tech startup landscape.

Report - How European Retail Tech startups are driving the $26 trillion Retail R/Evolution

Demystifying the retail apocalypse 

Of the $26 trillion global retail sales, 80% of purchases are still happening offline, with the majority already researched online and transactions also rapidly shifting online. Major retail failures have dominated headlines. In reality, it’s more a shake-out of those who do not adapt, rather than an apocalypse. This report focuses on technologies being developed to solve retailers’ main challenges.

How we have defined Retail Tech

The Retail tech landscape includes technologies used for both offline and online retail, often both at the same time. We’ve broken down the sector along the customer journey, as follows. We’ve created this interactive landscape of Retail Tech to explore in more detail.

The massive potential of Retail Tech has started to be unlocked

Payment company Adyen, with its $25 billion+ valuation, has demonstrated the enormous potential of the retail tech sector to drive significant value. Payment platforms are responsible for 38% of the total €86 billion combined market cap created so far by European B2B retail tech startups. Payments, however, are only a thin layer in the entire retail value chain. This illustrated the massive potential in the rest of the value chain.

The next generation of Retail Tech startups is emerging

European retail tech startups have received €4.6B in early-stage capital since 2015, growing by 10% YoY since 2015 to €1.2B in 2019, an all-time record. Surprisingly, this is not much less than US Retail Tech startups, which have raised €1.5B in 2019.

While the €1.2B in 2019 is an all-time record, growth is relatively modest compared with other sectors so far. European retail tech is still at an early stage of development. For instance, 91% of rounds are smaller than €10M, which is 7% in the overall European early-stage capital market.

Interviews with Retail Tech entrepreneurs

The report also features stories from entrepreneurs working with some of the world’s leading retail brands, including:

  • Joaquin Villalba, CEO and co-founder of Nextail, realised advanced analytics and AI that could transform merchandising and the misalignment of supply and demand that causes billions of dollars in losses every year due to markdowns and unsold products.
  • Luca Pagano, BeMyEye’s CEO, has created a brand-new way of collecting and processing in-store data by leveraging the power of crowdsourcing, in addition to image recognition (IR) and machine learning (ML) technologies.
  • Olga Kotsur, CEO and co-founder of Mercaux, created an in-store digital transformation solution that helps drive business performance with AI-driven styling suggestions, store communications, and advanced analytics.
  • Jaime Laulhe, CEO and co-founder of Geoblink, discovered that the main challenge retailers are facing is understanding location as the “market context”, for this, Geoblink’s advanced data capabilities and predictive statistics help retailers gain strategic insights about their networks and implement tailored action plans per location.
  • Mustafa Khanwala, CEO and co-founder of MishiPay, provides the cashier-less store solution, allowing in-store shoppers to use their own mobile phone to scan and pay for their chosen items, and then simply exit the store with their purchase.

The report also includes views and predictions from European VCs investing in the industry, such as:

  • Oksana Stowe, Principal & Head of Seed Fund at True, Europe’s retail & consumer sector specialist operating across the entire investment vertical.
  • Jordi Vinas and Carles Ferrer, General Partners at Nauta Capital, as a sector-agnostic investor, some themes Nauta has invested in include HR tech, retail tech, data & analytics, martech, amongst others.

Report - How European Retail Tech startups are driving the $26 trillion Retail R/Evolution