Perspectives on In-Store Retail Technologies H1 2024

We are delighted to share our insights on the In-store Retail Technologies sector, with the goal of improving transparency and communication among companies, as well as financial and strategic investors. The report highlights M&A and Private Placement (PP) deal activity, and showcases the valuation of publicly listed entities in the space.

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Retailers are experiencing margin compression due to increased competition, inflationary pressures, and labour shortages. In response, there is a growing need for retail technologies that enhance efficiency and streamline operations. In particular, we are witnessing a significant increase in the adoption of AI & ML-powered platforms for inventory optimization, demand forecasting, analytics, and personalization.

Other key trends highlighted in the report:

  • A majority of retailers are looking to ramp up AI infrastructure investments in the next 18 months, with analytics, loss prevention, and personalization being the key focus areas
  • Computer vision is revolutionizing traditional retail by meticulously monitoring customer movements and product interactions, providing retailers with invaluable data
  • The in-store retail tech sector across North America and Europe saw 110 M&A deals from Jan ’22 to May’24. Notably, the M&A space has remained stable since Jan’22, characterized by a few landmark deals
    • Financial investors continue to be active in the sector’s M&A space and have executed large deals since Jan’22, such as the acquisition of Zendesk by Hellman & Friedman and Permira, Coupa by Thoma Bravo, Alteryx by Insight Venture and Clearlake Capital, and myPOS by Advent International
    • Key retail tech vendors (such as Shift4 Payments, Cegid, StrongPoint, Symphony AI, and Standard AI) seek acquisitions to expand their tech offerings and fortify their market positioning
  • The in-store retail tech space reported 126 PP deals totaling $8.1BN+ since Jan’22. The analytics vertical saw 33 deals totaling $1.9BN, followed by computer vision with 23 deals totaling $467.9MM, and POS & checkout solutions with 18 deals totaling $3.4BN
    • Investors have demonstrated a strong interest in AI & ML-enabled retail planning, analytics, and generative AI platforms. They have also actively funded AI-powered computer vision platforms, backing firms like Standard AI, Everseen, Zippin, RADAR, and AiFi
  • The analytics cohort (including Snowflake and C3.ai), with robust revenue growth expectations, commands a substantial revenue multiple premium (10.0x FY24E revenue) but is yet to be EBITDA positive