The founders of six-month-old RetailReady, graduates of YC's Winter 2024 cohort, say they discovered an overlooked area of the warehousing/delivery industry, which costs retail brands roughly $40 billion a year.
They're developing a tablet app to replace paper warehouse manuals with packing instructions. Co-founders Elle Smyth and Sarah Hamer came up with the idea while working together at Stord, a supply chain unicorn startup.
“We met and bonded over our love of the supply chain industry,” Smith told TechCrunch. “We call it an engineer's playground. There's no shortage of problems to solve.”
Smith and Hammer left Stord and began working seriously on their startup idea after being accepted into Y Combinator. “One of the things that Sarah and I are really confident in is that we have an extremely high founder-market fit,” they said.
RetailReady tablet application Image credit: RetailReady /
Smith said RetailReady targets the $40 billion compliance market to help reduce the number of retail compliance losses shippers incur each year due to mis-shipped packages. The company uses two types of AI techniques to help reduce improperly shipped items: large-scale language models that ingest manual shipping requirements and computer vision to verify compliance.
The supply chain and logistics industry is a huge market, and as more and more shipments are shipped via online shopping, there's no shortage of established companies and new startups trying to get a piece of the pie. Many of these are third-party logistics companies, such as Hopstack, Techtaka, Ranpack, and ShipBob.
Smith said RetailReady is more niche: Warehouse workers must refer to a “phone-book-sized” manual on how to ship goods to retailers like Target and Walmart. The manual includes information on how to package orders according to regulations, such as how to fold clothes in a certain way, where to put RFID tags and where to label according to product category.
If delivery or warehouse workers fail to pack these items correctly, retailers will charge the brand a fee known as a chargeback. “Brands will see an average of 3% of their invoices deducted just because these requirements were not met,” she said.
RetailReady replaces those manuals with digital versions, providing workflows that instruct workers on how to properly pack orders, and in a feature currently in development, the app will use computer vision to verify orders as they are being packed to ensure compliance.
“We're really excited to continue on the product side, including our computer vision module, where we can take a picture of what a worker is doing and actually verify if they've done the job correctly,” Smith said.
Smith was mum on growth rates, but said six months after launching, he and Hammer have signed up six customers. The company works with brands, warehouses and retailers.
The founders have raised $3.3 million in seed funding, which they plan to use to hire additional employees and focus on product and technology development.
Wischoff Ventures led the round, with participation from Y Combinator, 640 Oxford, Lombardstreet Ventures, Duke Capital Partners, and a group of angel investors including Cargado co-founder and CEO Matt Silver, Stord co-founder and CTO Jacob Boudreau, and Scale Angels Fund.