An Aliso Viejo-based company that created an inventory tracking tool for retail stores closed a $2 million seed round.
Adroit Worldwide Media Inc. uses artificial intelligence to enable companies like PepsiCo Inc. to get real-time inventory updates and to send brand messages to customers.
Mark IV Capital Inc., a privately held investment firm, and Peter Ueberroth’s Contrarian Group Inc.—both out of Newport Beach—were co-leads and took a 20% stake in Adroit, Chief Executive Kevin Howard said. A seed round may be followed by series A and B rounds where venture capitalists are the big players. But a $2 million seed round is unusually high. And Howard said the round was oversubscribed.
The Adroit founders previously raised about $1.6 million through friends and family, Howard said. He and his two other co-founders launched the company in February 2016. Adroit projects it will reach $2 million in revenue this year, Howard said, adding that the company is on target to have 30 employees by December. Prior to co-launching the company, Howard was chief executive of Internet Connectivity Group Inc. in Lake Forest and worked in wealth management for Smith Barney.
Adroit will use the fresh capital for hiring as well as marketing, product development and global expansion, Howard said.
Adroit sells its hardware, known as a smart shelf, to retail outlets. Adroit’s sales model offers two options: Either customers can purchase the hardware and own it outright, or they can purchase the entire package as a service. Most have been the former, Howard said. It works in two ways. For its business clients, the shelf tracks inventory using artificial intelligence. When a Pepsi driver visits a Ralphs to restock the shelf, for example, the driver already knows exactly how many bottles are needed. As soon as the shelf is restocked, Adroit sends a report to Pepsi’s headquarters, a process that used to take about 90 days, Howard said.
The second service Adroit provides is for its clients’ customers, and here’s where it uses its facial-recognition software. For Pepsi, the company programmed its technology to recognize all ethnicities. Based on what the smart shelf perceives, high-definition monitors will display promos and price tags in either English or Spanish. The Spanish messages are only being sent in the Denver metro area right now, Howard said. “It shows consumers a company is willing to drive messaging to them personally.”
Another service Adroit provides to retailers is to arrange their merchandise in an age-appropriate manner. If someone wants a toy for a 3-year-old at Toys R Us, all the toys for 3-year-olds will be in the same location, not spread around stores. The smart shelves handle the arrangement with an automated, digital product placement tool. That allows placement on a single shelf or placement in the same space at all stores anywhere in the world in real-time, Howard said.
That dovetails with Adroit’s mission of trying to provide the same experience in a retail store that shoppers get online. The idea here is that if you were shopping for a 3-year-old online, you would enter “toys for 3-year-olds” in the search function and get only toys for 3-year-olds.
Adroit has smart shelves in California, the Midwest and East Coast, Canada, France and Spain, and intends to have them soon in Mexico, Howard said.
Kadho Sports to Separate
Kadho Sports is raising $2 million in a seed round to separate from its parent company, Kadho. Kadho Sports developed technology using neuroscience research. The technology works to enhance athletic performance by training the mind in reaction time, anticipation skill, and visualization. It’s used by college and high school sports teams.
Essentially, it works to help athletes gain a better sports sense.
“For the longest time people thought, you either have a sports sense or [you don’t],” co-founder Kaveh Azartash said. “Science has shown that with perceptual learning, you can train that, and we managed to prove that with our NCAA clients.”
Kadho Sports’ technology applies the fundamentals of neuroscience, such as how the brain works in going from attention to concentration. It adds footage from various sports. It puts that all together in a mobile gaming-esque app that athletes access from their phones and tablets. The dashboard can be used by coaches to monitor performance, among other things.
Kadho Sports’ clients include NCAA football, baseball and volleyball teams. Schools include the University of California-Los Angeles, University of Southern California and the University of Arizona. Kadho Sports also supports U.S. Olympic teams in advance of the 2020 games.
Drink Co. Incubated
A beverage company hatched inside Costa Mesa incubator Alchemy Factory is shipping its first cases and seeking distribution partners. The DrinkBryte Co. LLC created BryteLife, an electrolyte club soda. The goal is to get BryteLife into clubs, restaurants, bars and spas, said Fabio Gratton, co-founder and chief marketing officer. The founders bootstrapped the company with $150,000.
Gratton launched the incubator himself in 2013.
