Radar, a fledgling platform that combines radio frequency identification (RFID) with computer vision to help retailers automate inventory management and more, announced that it has raised $16 million in a round of funding from Ashton Kutcher’s Sound Ventures, NTT Docomo Ventures, Align Ventures, Beanstalk Ventures, Colle Capital, Founders Fund Pathfinder, and Novel TMT.

The company said that a couple of its stealth customers — two undisclosed billion-dollar retailers — also invested in the round.

An estimated $1.1 trillion is lost each year to “inventory distortion,” defined as any situation in which a customer intent on buying an item isn’t able to due to misplaced or out-of-stock goods. It can also refer to a retailer having more stock than demand requires.

RFID tags have long been used by retailers in environments such as warehouses and distribution centers to expedite and automate the process of tracking and counting goods. The tags can be used to check boxes or pallets into a store or storage facility and even to track individual items (rather than the broader SKU) at any point in their journey. What may have once required several employees to manually check incoming or outgoing goods can be done with a simple scanning device. And unlike barcodes, RFID relies on low-power radio waves that don’t require line-of-sight to identify items.

But RFID isn’t a perfect solution for every scenario — for example, it may not be able to tell you the precise location of an RFID-tagged item, which could be essential in future retail outlets.

“RFID technology was originally designed to help retailers improve inventory management, but most solutions remain highly manual, limited in capability, or too expensive to deploy,” said Radar cofounder and CEO Spencer Hewett.

Moreover, the retail store of the future is a very different beast from that of years gone by. Amazon is doubling down on its cashierless Amazon Go outlets; Kroger and Microsoft recently announced a tie-up for connected, data-driven stores; and there are countless similar trials in the works elsewhere. Automation is the name of the game: A truly intelligent store knows where everything is and where everything isn’t.

And that is precisely what Radar wants to facilitate, with a proprietary platform encapsulating hardware and software that allows brick-and-mortar stores to keep pace with the Amazons of the world — not just in terms of automation, but also in meeting customer expectations.

“The rise of Amazon and direct-to-consumer brands has created unprecedented consumer expectations around speed and convenience,” Hewett added.

Six years in the making

Founded out of New York in 2013 by Hewett — a Thiel Fellow and Y-Combinator alum — Radar spent the first three years of its life in “solo R&D” mode as Hewett sought to refine his RFID localization technology.

Hewett brought on two cofounders in 2016 — Michael Murphy (COO) and Adam Blair (CTO) — to accelerate commercialization. Murphy was formerly head of RFID at Inditex (which owns Zara) throughout the Americas, while Blair was cofounder and CEO of Encinitas Laboratories, an engineering company that built Intel’s RFID products and that Intel went on to acquire outright.

Radar says its RFID technology is different from traditional RFID, as the company builds everything from the ground up using “proprietary signal processing methods and location algorithms” that improve the ability to identify an RFID tag in three dimensions.

Each Radar sensor also sports four built-in cameras, designed to work in conjunction with the RFID, which opens up additional possibilities. An accurate location reading combined with visual perception smarts allows stores to ascertain where everything is, which is required for item-level analytics and makes it easier to garner data from brick-and-mortar stores, as with ecommerce websites. Autonomous checkouts is another scenario that Radar hopes to cater to in future.

Above: Radar’s white sensor has RFID and computer vision technology

“We recognize the power of truly integrating RFID and Computer Vision,” Hewett said. “This is why we’ve gone through the effort of developing proprietary, advanced signal processing methods and a proprietary sensor that allows us to realize the benefits of both technologies. In doing so, we’ve created a scalable solution that not only solves inventory management but also enables ecommerce quality analytics and autonomous checkout in all retail stores.”

But that’s in the future — for now, Radar’s inaugural product is all about helping retailers keep tabs on their stock in real time.

“Retailers still don’t know exactly what they have in their stores, let alone where it is, and it’s costing them billions,” Hewett added. “By combining RFID and computer vision, we’ve created the only solution on the market that allows retailers to know exactly where all their products are in real time in 3D, from the floor of a fitting room to the highest stockroom shelf. This allows retailers to make every last unit available to all customers both in-store and online.”

Radar had previously raised just $600,000 in outside funding, but with an additional $16 million in the bank it will target its first commercial deployment with three undisclosed enterprise customers this year.

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