The State Of The Retail Technology Industry - A CB Insights Overview

Retail technology has never been hotter as the industry rapidly adopts to changing dynamics around omnichannel and unified commerce, supply chain optimization and in-store transformation. CB Insights has put out a fabulous retail tech report worth reading and here is a summary that just scratches the surface of its 190 pages: Record investment, exits, and billion-dollar companies created.

Global retail tech funding reached over $100 billion for the first time in 2021 with a 78% YoY jump in exits, 97 new retail tech unicorns created and a 71% jump in deal size as companies grow faster and demand more later stage financing and “mega rounds” proliferate. Median IPO valuations doubled and going from $612 million to $1.392 billion.

In-store retail tech investment jumps with focus in the US and eCommerce leads funding increase, tripling year-over year

Average deal size for in-store technology doubled from $22m to $45m as the US led increases in the focus in brick-and-mortar operations and experience.

eCommerce funding tripled from $18.8 billion to $54.1 billion, even as the number of deals grew by just 50%. eCommerce technologies are now later stage and commanding higher multiples. Another measure of company maturity, IPOs quadrupled, leading to greater liquidity for investors.

Looking at CBInsights Retail Tech 100, eCommerce and store operations dominated.

Supply chain investment doubled, even as the number of deals declined.

Given the immense focus on supply chain, it was surprising that the number of supply chain technology investments declined, even as the total value of funding doubled. Megarounds from companies like Gorillas, Nuro, Deliverr, Fabric and others drove the value increase.