(Bloomberg) -- Syrup Tech Inc., a startup that makes artificial intelligence tools to help fashion retailers plan and manage their inventory, has raised $17.5 million in a funding round led by Accel.
The company’s software aims to use AI to reduce retail industry waste, a problem likely to be especially severe this holiday season after consumers’ record-breaking Cyber Monday shopping spree.
The startup’s investors include Google’s Gradient Ventures, which focuses on AI, and 1984 Ventures. The new funding round brings Syrup’s valuation close to $100 million, according to a person familiar with the matter.
“Retail is still one of the most wasteful industries in the world,” said co-founder and Chief Executive Officer James Theuerkauf. “We’re able to show our customers in a matter of weeks how much better we are than baseline,” he said, to help them avoid issues such as excess inventory or running out of stock.
Syrup’s co-founders started the company in 2020, after watching retailers struggle with quick-shifting inventory needs during the pandemic. During lockdowns, consumers dramatically shifted their shopping habits, which wreaked havoc on retailers’ supply chains.
The startup, based in New York, plans to hire more staff to expand from about 30 employees to 70 people by the end of next year. The funding round brings its total amount raised to about $25 million.
Syrup’s customers include Reformation and Faherty Brand. Reformation Inc.’s chief operating officer, Ivan Tchakarov, said Syrup has helped the retailer improve how it allocates stock across about 40 stores and increased efficiency in distribution and warehouse facilities. “You need to be able to predict demand at a style, size, location level, which is pretty impossible to do with just spreadsheets,” said Tchakarov, who previously worked at Alphabet Inc.’s Google.
Tchakarov said Reformation has been able to increase the percentage of times it has an item available and in stock at a store for a customer to purchase, from 70% of the time to 90% without buying more inventory. “This is where Syrup is quite strong,” he said.
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