Issue #64: NYC’s Retail AI Boom

NYC’s Retail AI Boom

A couple of weeks ago, Sequoia Capital, a large venture capital fund, declared that there was an opportunity to build a $1 trillion company in retail. The next Amazon in their eyes. A couple of the technologies they suggested that a company could reach a $1T scale were purchasing assistance, technology to link different AI tools/other interfaces like websites (MCP), preemptively predicting orders by shipping them ahead of time, roaming autonomous stores, and AI IOT using computer vision to automatically restock your fridge or pantry. These are some really exciting ideas, and one idea I would add to it is AI software that is improving the fragmented, manual retail supply chain or retail process in general. Being based in NYC, I have seen the number of startups in the space based here skyrocket, all building to solve those aforementioned issues, as well as many other retail issues that occur in the messy retail world day-to-day.

In fact, across the 11 early-stage retail AI startups in NYC that I have been tracking, they have raised over $220 MILLION, with a plethora of that funding coming in recently. Including some more established startups, the total funding raised by companies on this list is over $1B.

I have always been bullish on NYC as a city to build startups due to the combination of capital, industry expertise, and incumbents located here. In the retail/CPG/restaurant industry, that could not be more apparent. With that in mind, let’s dive into some of the exciting early-stage, retail AI companies located in NYC.

Early Stage Retail AI

• Actuate ($12M Raised) - Actuate uses AI video analytics to proactively monitor security. Has clients in the retail/SMB industry.

• Aisle (Unknown Amount Raised) - Aisle is a marketing software utilized by CPG brands to run loyalty programs and get insights from customer-submitted receipts.

• Blackbird Labs ($85M Raised) - Blackbird, which was founded by one of the founders of Resy, is a payments and loyalty platform for restaurants that leverages blockchain technology to facilitate payments. The AI technology in this case is more backend.

• Crafted (Unknown Amount Raised) - Crafted helps CPG brands drive retail sales through influencers, with its core product being a campaign management software. One of the features is using AI to measure in-store sales lift.

• Confido ($20M Raised) - Confido uses AI to help CPG brands manage their finances. In particular, helps with cash application of retail payments, retailer deduction analysis and management, trade management, and sales forecasting.

• Flip ($9M raised) - Flip is a white label software for retailers and eCommerce brands to automate their voice calls using a voice AI agent.

• Glimpse ($10M Raised) - Glimpse uses AI to help CPG brands manage their retailer deductions.

• Keychain ($68M Raised) - Keychain is a supply chain tool powered by AI, to help CPG brands, manufacturers, and retailers manage the entire supply chain. It is a mix of project management, CRM, supplier browsing, chatbot, process management, and more.

• Sante ($500k Raised) - Sante is building a POS system for liquor stores. Features include receiving, ecommerce, delivery apps, and more in one platform, all powered by AI.

• Sciemo (Unknown Amount Raised) - Sciemo is using AI to support consumer brands. In particular, they are focusing on the Sales and Operations Planning (S&OP) process, pricing, promotions, channel optimization, and inventory management.

• Spate ($2M Raised) - Spate uses AI to help CPG and Beauty brands and retailers conduct market research as well as trend research.

• Superorder ($13M Raised) - Superorder is a tool for restaurants that provides AI agents to maximize their reputation, delivery profitability, and power a better customer experience.

Growth Stage Retail AI

There are also some startups, albeit at the growth stage, that are building some exciting stuff in the same space I wanted to highlight.

• Dataiku ($600M Raised) - Dataiku is a platform using AI to help large enterprises with analytics, modeling, and AI agents. They support many CPG brands selling into retail, including Johnson & Johnson, Unilever, LVMH, and more. Dataiku was founded in 2013.

• Qloo ($74M Raised) - Qloo helps retailers and brands understand consumer preferences and lifestyle. They use AI to help interpret the data and make predictions to support personalization.

• (Go) Radar ($63M Raised) - (Go) Radar is a software for retailers to manage inventory, measure customer interactions, and do autonomous checkout using RFID tags, computer vision, and AI.

• Radar ($86M Raised) - Radar is used by many retailers to understand where people are located, and use that to power experiences, everything from store maps to delivery to geolocation compliance. There is AI running in the background powering these features. Radar is further along than many other companies on this list.

Additionally, wanted to give a couple of shout-outs to some retail AI adjacent startups headquartered in NYC:

Apollo Bagels (retail bagel chain), Accrue (white label payments and loyalty), Bandana (Job Marketplace), Bilt Rewards (credit card), Blank Street Coffee (retail coffee chain), Fora Travel (AI agents for travel agents), Just Salad (retail salad chain), Pickle (secondhand consumer app marketplace with AI search), PopUp Bagels (retail bagel chain), Resortpass (marketplace for daily activities), and Seventh Street Burger (retail burger chain).

What are your favorites? Who did I miss? Don’t hesitate to reply!

dsw

965K followers

View more on Instagram

DSW Tests Overhauled Store

Designer Shoe Warehouse (DSW) is a shoe retailer, owned by Designer Brands, with over 500 locations, founded in 1969. Like many others in the retail clothing and apparel space, the rise of eCommerce has created challenges. In particular, given the success of Zappos, I would hypothesize that it has hurt their business over the last 10 or so years. Still, to some extent, shoes remain an item that has a strong case to be purchased in person, especially if the eCommerce retailers do not offer free or seamless returns. Shoe sizing is very fickle, so it can make sense to be more in person. DSW realized that, and has launched a new concept in Framingham, Massachusetts. The new store is a mix of a Gen Z focused assortment and technology. In terms of Gen Z, the assortment features more cowboy boots and kitten heels, while there are also customizable tote bags. In terms of technology, a foot scanning device has been implemented that leverages AI to suggest potential options. Some of the changes for the Gen Z focus feel a little forced, but it is good DSW is pushing to test new things. After seeing a Q2 4% sales drop YoY, new innovation will be needed to return to growth. Time will tell if these are the silver bullets to success, but as long as that test-and-iterate mindset is there, I am confident the right solution can be found.

Broadway In Trouble?

This week, the New York Times penned an article examining the profitability of Broadway shows. This article made the rounds with many perspectives on the future of the live theatre industry. Given the importance of live theatre to the retail industry, I thought it would be interesting to look into it. From the article, a couple of stats stand out:

• From May 2024 to May 2025, 18 new musicals opened, and none have made a profit yet (some are still running)

• Since 2020, 43 of the 46 new musicals that have opened on Broadway have lost money

• The president of the Broadway League, estimates that the share of musicals that are profitable has fallen by 50 percent in the last decade (under a previous time period, 6 of 46 would have been profitable)

On the same hand, a couple of stats stand out from the Broadway League fiscal year reporting (from May 2024 to May 2025):

• The 2024-2025 season grossed $1.9B, a 23% period-over-period increase, and the highest ever

• Total attendance, there were 14.7M admissions, a 19.3% increase period-over-period

• Attendance was the second highest ever on record, only bested by 14.8M admissions in the 2018-2019 season

• From November 4th through December 29, 2024, attendance was especially historically high, and saw consecutive 300k attendance weeks through the period, a rarity

• Capacity (available seats filled) was 91.2%, up from 89.6% in the previous period and up from 89.8% in the 2018-2019 season

Clearly, multiple things can be true, a nuance that is ever-present in retail and retail adjacent industries. Profitability is falling for the industry, although it’s not like it was that great to begin with. On the other hand, demand is rising, and the capacity filled is improving. Broadway clearly has some improvements to make, but I do not agree with the idea that it is in serious trouble. An evolution, not an end.

Area 2 Farms Announces Fundraising

In the spring, I was very fortunate to attend a conference hosted by Slow Ventures on the future of Retail, SMB, and more. (a full breakdown of my takeaways in Issue #46) As part of that conference, one of the panels was startups presenting their concepts, one of them was Area 2 Farms, which I would go on to feature in Issue #50. A quick refresher, Area 2 Farms is a franchise farm company that allows people to become a farmer, especially in urban areas. They have developed Silo, a multi-level, vertical, conveyor belt farm that replicates a plant's day cycle, which reduces energy usage and increases production. This week, Area 2 Farms announced a $9M raise to scale beyond the original farm, which has over 1,000 customers. Combining two of my interests, food and franchises, I am excited to see how the scaling goes. The round was led by Slow Ventures and Seven Seven Six, with participation from ANIMO Ventures.

• Summary: Modern Animal is a vet offering in-person primary care and urgent visits, as well as 24/7 hour emergency coverage. Leveraging a membership and tech-first approach, it has helped them scale. It is currently at a $100M revenue run rate.

• My Take: Pet care is a massive market, which is also growing very fast. The market growth is due to more people having pets and a greater willingness to spend money on their pets. With that willingness, that means the standards are raised. The food space was the first to be overhauled, with companies like The Farmer’s Dog, but I expect the vet market to undergo a similar transformation.

• Founder(s): Steven Eidelman

• Funding: $46M from Addition, True Ventures, Upfront Ventures, and Founders Fund

• Number of Locations: 27

• Social Media Following: 41k TikTok, 39k Instagram

Additional Links:

1. Despite Gen Z spending less on alcohol, they just have less money to spend, the share of wallet is the same (read more here)

2. A recap from Shoptalk, a conference on retail, overviewing AI, assortment reviews, and in-store retail (read more here)

3. GEO is the new SEO - how can retailers capitalize? (read more here)

4. Matter Formula, a precision nutrition restaurant, announces launch in NYC (read more here)

5. Michaels, traditionally an art-focused stores, added knitting and party supplies, trying to capitalize on Joann and Party City bankruptcies (read more here)

6. How Aldi has overhauled its private label program (read more here)

7. Amazon settles with FTC for $2.5B over deceptive Prime membership practice allegations (read more here)

8. Sprouts is opening up 20 cafes in its grocery stores (read more here)

9. Target launches in-store experiences for kids during the holidays (read more here)

10. Raley’s, a regional grocery chain in California, launched a new waste prevention system (read more here)

Was this forwarded to you? Sign up here.

Have an idea or want to chat? Respond to this email.

Is the email not reaching your inbox? Try this trick.